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[COMMITTEE PEINT 96-6] 



V 



BASIC LAWS AND AUTHORITIES ON 

HOUSING AND COMMUNITY DEVELOPMENT 

REVISED THROUGH JANUARY 3, 1979 



COMMITTEE ON BANKING, FINANCE 

AND URBAN AFFAIRS 

HOUSE OF REPRESENTATIVES 

96th CONGRESS, FIRST SESSION 




Part 1 



Printed for the use of the 
Committee on Banking, Finance and Urban Affairs 



[COMMITTEE PRINT 96-6] 



BASIC LAWS AND AUTHORITIES OX 

HOUSING AND COMMUNITY DEVELOPMENT 

REVISED THROUGH JANUARY 3, 1979 



COMMITTEE ON BANKING, FINANCE 

AND URBAN AFFAIRS 

HOUSE OF REPRESENTATIVES 

96th COXGRESS, FIRST SESSION 




Part 1 



Printed for the use of the 
Committee on Banking, Finance and Urban Affairs 



U.S. GOVERNMENT PRINTING OFFICE 
45-704 WASHINGTON : 1979 



For sale by the Superintendent of Documents. U.S. Government Printing Office 
Washington. D.C. 20402 



HOUSE COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS 



HENRY S 
THOMAS L. ASHLEY. Ohio 
WILLIAM S. MOORHEAD, Pennsylvania 
FERNAND J. ST GERMAIN, Rhode Island 
HENRY B. GONZALEZ, Texas 
JOSEPH G. MINISH. New Jersey 
FRANK ANNUNZIO, Illinois 
JAMES M. HANLEY, New York 
PARREN J. MITCHELL, Maryland 
WALTER E. FAUNTROY, 

District of Columbia 
STEPHEN L. NEAL, North Carolina 
JERRY M. PATTERSON, California 
JAMES J. BLANCHARD, Michigan 
CARROLL HUBBARD. Jr., Kentucky 
JOHN J. LaFALCE, New York 
GLADYS NOON SPELLMAN, Maryland 
LES AuCOIN, Oregon 
DAVID W. EVANS, Indiana 
NORMAN E. D AMOURS, New Hampshire 
STANLEY N. LUNDINE, New York 
JOHN J. CAVANAUGH, Nebraska 
MARY ROSE OAKAR, Ohio 
JIM MATTOX, Texas 
BRUCE F. VENTO, Minnesota 
DOUG BARNARD, Georgia 
WES WATKINS, Oklahoma 
ROBERT GARCIA, New York 
MIKE LOWRY, Washington 

Paul Nelson, Clerk end Staff Director 

Michael P. Flaherty, General Counsel 

Mercer L. Jackson, Minority Staff Director 



REUSS, Wisconsin, Chairman 

J. WILLIAM STANTON, Ohio 

CHALMERS P. WYLIE, Ohio 

STEWART B. McKINNEY, Connecticut 

GEORGE HANSEN, Idaho 

HENRY J. HYDE, Illinois 

RICHARD KELLY, Florida 

JIM LEACH, Iowa 

THOMAS B. EVANS, Jr., Delaware 

S. WILLIAM GREEN, New York 

RON PAUL, Texas 

ED BETHUNE, Arkansas 

NORMAN D. SHUMWAY, California 

CARROLL A. CAMPBELL, Jr., 

South Carolina 
DON RITTER, Pennsylvania 
JON HINSON, Mississippi 



Subcommittee on Housing and Community Development 
THOMAS L. ASHLEY, Ohio, Chairman 



J. WILLIAM STANTON, Ohio 
CHALMERS P. WYLIE, Ohio 
STEWART B. McKINNEY, Connecticut 
RICHARD KELLY, Florida 
THOMAS B. EVANS, Jr., Delaware 
S. WILLIAM GREEN, New York 
JIM LEACH, Iowa 
ED BETHUNE, Arkansas 
DON RITTER, Pennsylvania 



WILLIAM S. MOORHEAD, Pennsylvania 
FERNAND J. ST GERMAIN, Rhode Island 
HENRY B. GONZALEZ, Texas 
JAMES M. HANLEY, New York 
WALTER E. FAUNTROY, 

District of Columbia 
JERRY M. PATTERSON, California 
JOHN J. LaFALCE, New York 
LES AuCOIN, Oregon 
GLADYS NOON SPELLMAN, Maryland 
JAMES J. BLANCHARD, Michigan 
DAVID W. EVANS, Indiana 
STANLEY N. LUNDINE, New York 
MARY ROSE OAKAR, Ohio 
BRUCE F. VENTO, Minnesota 
WES WATKINS, Oklahoma 
ROBERT GARCIA, New York 
MIKE LOWRY, Washington 

Gerald R. McMurray, Staff Director 

Roger C. Faxon, Professional Staff Member 

Diane E. Dorius, Aegistant Coumel 

Anthony Valanzano, Minority Counsel 



(II) 



LETTERS OF TRANSMITTAL 



December 1979. 
To: All Members of the Committee on Banking^ Finance and Urban 
Affairs: 

I hereby transmit for the use of the Committee on Banking, Finance, 
and L^rban Affairs a revised Committee Print entitled. "Basic Laws 
and Authorities on Housing and Community Development.'' This com- 
pilation of laws and authorities is being updated in response to the 
numerous requests from Members of Congress and the public. The 
revision is made necessary by laws enacted, and numerous Executive 
Orders issued, since January 3. 1978, the date of our last revision. 

The laws. Executive Orders, and other authorities contained in this. 
Committee Print are those which authorize the functions and activities 
of the Department of Housing and Urban Development, or which are 
closely related to those functions and activities. They are arranged in 
accordance with their subject nuitter and are divided into the general 
categories of "Housing,'' "Community Development"' and other "Gen- 
eral Laws Applicable to Housing* and Community Development 
Activities." 

The Committee has been assisted in the preparation of this revised 
compilation by the Office of General Counsel in the Department of 
Housing and Urban Development. As in past years, the excellent tech- 
nical assistance provided by this Office has proved invaluable. 
Sincerely, 

Hexry S. Reuss, Chairman. 



December 1979. 
Hon. Hexry S. Reuss, 

Chaii^man, Cmnmittee on Banking, Fijiance and Urhan Affairs. 
U.S. House of Rep?rsentatires. 'Wa.'<hinqton. B.C. 

Dear Mr. Chairmax : Transmitted herewith for your consideration 
is an extensive revision of the Committee publication "Basic Laws and 
Authorities on Housino- and Community Develo]mient." 

Due to the increased volume and the rapidly changing nature of laws 
and authorities relating to housing and community development, pe- 
riodic revisions of this compilation of "Basic Laws" is necessary. 

In transmitting this revised compilation. T would like to acknowl- 
edge the excellent assistance in its preparation we received from the 
Office of General Counsel, Department of Housing and Urban 
Development. 

Sincerely. 

Thomas L. Ashley, 
Jhairman. Siibronimittee on Housing 

and ComTTiunity Development. 

ail) 



CONTENTS 



Part I— Basic Laws and Authorities on Housing ^*^® 

National Housing goals and reports 1 

Department of HUD — General policy directives 9 

Organizational chart of HUD 19 

Local housing assistance plans — fund allocation 21 

Fraud and false statements 23 

Employment of lower income persons 24 

Transfer of certain 22 1 ( d) ( 3) and 202 mortgages to 236 program _ _ 27 

Sale of surplus Federal land for housing 27 

Congressional Budget and Impoundment Control Act 29 

Joint Funding Simplification Act 75 

Department of Housing and L^rban Development Independent 

Agencies Appropriation Act, 1978 81 

Supplemental Appropriations Act, 1977 89 

Appropriation Act — 1975 92 

Supplemental Appropriations — 1975 98 

Appropriation Act — 1974 100 

Agriculture-Environmental and Consumer Protection Appropria- 
tion Act— Excerpts— 1974 107 

Appropriations — Rent Supplement — 1973 107 

Appropriations — Disaster Assistance — 1973 107 

Appropriations — Revolving Fund — 1955 108 

Appropriations Act — 1977 110 

Appropriations Act — Emergency Homeowners Relief — 1976 116 

Supplemental Appropriations — 1976__ 125 

Supplemental appropriations — 1978 130 

Appropriations Act— 1979 130 

Miscellaneous administrative provisions — HUD 138 

Advisory committees 140 

Civil defense — vulnerability to attack 141 

Jointly funded projects 141 

Byrd amendment — HUD contracts 142 

President's functions delegated to HUD 143 

Special Assistant for Cooperative Housing 145 

Strikes by HUD employees 145 

Vacancy in Office of Secretary 146 

Handicapped — accessibility to buildings 147 

Assigning emergency preparedness functions 149 

Executive Order 12049 — Defense economic adjustment programs. 152 
Federal Coordinating Council for Science, Engineering, and Tech- 
nology 154 

Delegation of Presidential functions 155 

Coordination of Federal urban programs 156 

National Institute of Building Sciences 159 

Paperwork reduction 164 

Insi)ector General 165 

National Housing Act— HUD ._ 173 

Housing renovation and modernization — title I 173 

Mortgage insurance — title II 184 

Miscellaneous — title V 309 

War housing insurance — title VI 320 

Insurance for investment in rental housing — title VII 337 

Armed services housing — title VIII 345 

National defense housing — title IX 358 

Mortgage insurance for land development — title X 366 

Mortgage insurance for group practice facilities — title XI 372 

FH A and V A interest rates 379 

(V) 



- VI 

Part I — Basic Laws and Authorities on Housing — Continued Page! 

Rehabilitation Act of 1973 382 

Commission on mortgage interest rates 385 

Right of redemption . 385 

Builders warranty 386 

Equity skimming 387 

Closing of military bases — mortgage defaults 387 

Low rent public housing — HUD ^_ 391 

Other HUD housing assistance programs 453 

Section 8 — Housing for large families | 452 

Emergency homeowners relief " 453 

Housing for the elderly 461 

College housing 469 

Rehabilitation loans 479 

Rent supplements 485 

Urban homesteading 491 

Assistance for housing in Alaska 493 

Public housing — territories 495 

Research, studies, demonstrations and solar energy 503 

Counseling 537 

Training and technical assistance 549 

Prototype costs 553 

International housing 557 

Operating assistance for troubled multifamily housing projects _ I 562 

Public housing security 568 

State housing and development agencies 571 

Congregate housing j 575 

HUD Programs Regulating Housing 583 

Fair housing 583 

Interstate land sales 601 

Real estate settlement 615 

Mobile home construction and safety standards 627 

Secondary market for mortgage loans 645 

Federal National Mortgage Association — FN MA 654 

Government National Mortgage Association — GNMA 658 

Federal Home Loan Mortgage Corporation — FHLMC 693 

Participation sales 694 

Interest rates — Federal-State conflict 700 

Rural, defense and veterans housing programs 701 

Department of Agriculture — FmHA 7Q1 

Department of Defense ' 739 

Veterans' Administration 751 

National financial institutions 776 

Department of Treasury, 776 

Investment powers 785 

Federal Home Loan Bank 797 

Federal savings and loan associations^ 809 

Federal financing bank 831 

National housing partnerships 839 

Federal Reserve — Mortgage Disclosure 844 

Financial privacy \ 848 

Index ^-^ (i) 

Part II — Basic Laws and Authorities on Community Development: 

Growth policy and planning 863 

New communities 863 

Intergovernmental Cooperation Act ' 885 

OMB Circular A-19 i 897 

0MB Circular A-95 911 

Executive Order 12044 — Improving Government regulations/ — • 937 

OMB Circular A-97 945 

Coastal Zone Management Act 947 

Comprehensive planning — section 701 ^77 

Clean air amendments 935 

Water Pollution Control Act 99I 

Excerpt from Department of Energy Act 997 

Excerpts from Energy Conservation and Production Act 997 

Planned areawide development 2025 

Urban mass transportation — planning __ jI^q33 

Urban and community impact analyses 1_ | 1044 

Interagency coordinating council { 1045 



VII 

Part II — Basic Laws and Authorities on Community Development — Con. Page 

Community development assistance programs — HUD 1047 

Community development block grantsi 1047 

Community Reinvestment, 1083 

Neighborhood Reinvestment Corporation I 1085 

Neighborhood Self-Help Development I 1091 

Livable cities | 1095 

National Commission on Neighborhoods 1099 

Urban renewal 1103 

Public works planning advances 1151 

Public facilities loans 1155 

Public facilities grants 1161 

Model cities .---t - ^^^'^ 

Open space and urban beautification 1175 

H istoric preservation 1183 

Lead-Based Paint Poisoning Prevention Act 1195 

Property disposal — Los Alamos 1203 

Community development insurance programs — HUD 1227 

Property and crime insurance 1227 

Floor 1 insurance 1245 

Rural and other non-HUD community development programs 1277 

Consolidated Farmers Home Administration 1277 

Rural Development Act 1303 

Headstart, Action anrl Community Economic Pevelopment 1311 

Regional action planning commissions 1321 

Appalachian Regional Development 1327 

Federal Aflvisory Council on Economic Development 1329 

Part III — Geneial Laws Applicaljle to Housing and Community Reloca- 
tion Assistance 1335 

Civil rights 1365 

National policy for the environment 1389 

Disaster assistance 1425 

Participation in Presidential and national committees 1485 

Glossary 1525 

Index (i) 



Digitized by the Internet Archive 
in 2013 



http://archive.org/details/basiclawsauthoriOOunit 



§2 

PART I: BASIC LAWS AND AUTHORITIES ON 

HOUSING 

NATIONAL HOUSING GOALS 

EXCERPT FROM THE HOUSING ACT OF 1949 

[Public Law 171, 81st Congress; 63 Stat. 413; 42 U.S.C. 1441] 

DECLARATION OF NATIONAL HOUSING POLICY 

Sec. 2. The Congress hereby declares that the general welfare and 
security of the Nation and the health and living standards of its people 
require housing production and related community development suffi- 
cient to remedy the serious housing shortage, the elimination of sub- 
standard and other inadequate housing through the clearance of slums 
and blighted areas, and the realization as soon as feasible of the goal 
of a decent home and a suitable living environment for every American 
family, thus contributing to the development and redevelopment of 
communities and to the advancement of the growth, wealth, and secu- 
rity of the Nation. The Congress further declares that such produc- 
tion is necessary to enable the housing industry to make its full contri- 
bution toward an economy of maximum employment, production, and 
purchasing power. The policy to be followed in attaining the national 
housing objective hereby established shall be: (1) private 
enterprise shall be encouraged to serve as large a part of the total need 
as it can; (2) governmental assistance shall be utilized where feasible 
to enable private enterprise to serve more of the total need; (3) ap- 
propriate local public bodies shall be encouraged and assisted to un- 
dertake positive programs of encouraging and assisting the 
development of well -planned, integrated residential neighborhoods, 
the development and redevelopment of communities, and the produc- 
tion, at lower costs, of housing of sound standards of design, 
construction, livability, and size for adequate family life; (4) govern- 
mental assistance to eliminate substandard and other inadequate hous- 
ing through the clearance of slums and blighted areas, to facilitate 
community development and redevelopment, and to provide adequate 
housing for urban and rural nonfarm families with incomes so low 
that they are not being decently housed in new or existing housing 
shall be extended to those localities which estimate their own needs 
and demonstrate that these needs are not being met through reliance 
solely upon private enterprise, and without such aid; and (5) govern- 
mental assistance for decent, safe, and sanitary farm dwellings and 
related facilities shall be extended w^here the farmowner demonstrates 
that he lacks sufficient resources to provide such housins: on his own 
account and is unable to secure necessary credit for such housing from 
other sources on terms and conditions which he could reasonably be 



§2 NATIONAL HOUSING GOALS 

expected to fulfill. The Department of Housing and Urban Develop- 
ment ^ and any other departments or agencies of the Federal Govern- 
ment having powers, functions, or duties with respect to housing, 
shall exercise their powers, functions or duties under this or any 
other law, consistently with the national housing policy declared by 
this Act and 'in such manner as will facilitate sustained progress in 
attaining the national housing objective hereby established, and in such 
manner as will encourage and assist (1) the production of housing of 
sound standards of design, construction, livability, and size for ade- 
quate family life; (2) the reduction of the costs of housing without 
sacrifice of such sound standards; (3) the use of new designs, mate- 
rials, techniques, and methods in residential construction, the use of 
standardized dimensions and methods of assembly of home-building 
materials and equipment, and the increase of efficiency in residential 
construction and maintenance; (4) the development of well-planned, 
integrated, residential neighborhoods and the development and rede- 
velopment of communities; and (5) the stabilization of the housing 
industry at a high annual volume of residential construction. 
******* 

Approved July 15, 1949. 



EXCERPT FROM THE DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT ACT 

[Public Law 89-174, 79 Stat. 667, 5 U.S.C. 6241 

DECLARATION OF PURPOSE 

Sec. 2. The Congress hereby declares that the general welfare and 
security of the Nation and the health and living standards of our 
people require, as a matter of national purpose, sound development 
of the Nation's communities and metropolitan areas in which the vast 
majority of its people live and work. 

To carry out such purpose, and in recognition of the increasing 
importance of housing and urban development in our national life, 
the Congress finds that establishment of an executive department is 
desirable to achieve the best administration of the principal programs 
of the Federal Government which provide assistance for housing and 
for the development of the Nation's communities, to assist the Presi- 
dent in achieving maximum coordination of the various Federal activ- 
ities which have a major effect upon urban community, suburban, or 
metropolitan development ; to encourage the solution of problems of 
housing, urban development, and mass transportation through State, 
county, town, village, or other local and private action, including 
promotion of interstate, regional, and metropolitan cooperation; to 
encourage the maximum contributions that may be made by vigorous 
private homebuilding and mortgage lending industries to housing, 
urban development, and the national economy; and to provide for 
full and appropriate consideration, at the national level, of the needs 



1 "Department of Housing and Urban Development" was substituted for "Housing and 
Home Finance Agency and its constituent agencies" by Public Law 90-19. approved 
May 25, 1967, 81 Stat. 17. 



NATIONAL HOUSING GOALS § 2 and § 1601 

and interests of the Nation's communities and of the people who live 
and work in them. 

******* 

Approved September 9, 1965. 



EXCERPTS FROM THE HOUSING AND URBAN DEVELOPMENT 

ACT OF 1968 

[Public Law 90-448, 82 Stat. 476, 601; 12 U.S.C. 1701t and 42 U.S.C. 1441a] 

AN ACT To assist in the provision of housing for low and moderate income 
families, and extend and amend laws relating to housing and urban develop- 
ment. 

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled^ That this Act may 
be cited as the ''Hoiisinor and Urban Development Act of 1968". 

DECL.VRATIOX OF POLICY 

Sec. 2. The Congress affirms the national ^oal. as set forth in sec- 
tion 2 of the Housinof Act of 1949. of "a decent home and a suitable 
living: environment for every American family.'' 

The Conofress finds that this ^oal has not been fully realized for 
many of the Nation's lower income families: that this is a matter of 
grave national concern: and that there exist in the public and private 
sectors of the economy the resources and capabilities necessary to the 
full realization of this <ioal. 

The Confrress declares that in the administration of those housing 
programs authorized l)y tliis Act which are designed to assist families 
with incomes so low that they could not otherwise decently house them- 
selves, and of other Government programs designed to assist in the 
pi'ovision of housing for such families, the highest priority and 
emphasis should be given to meeting tlie housing needs of those fam- 
ilies for which the luitional goal has: not become a reality; and in the 
carrying out of such programs there should be the fullest practicable 
utilization of the resources aiul capabilities of private enterprise and 
of individual self-help techniques. 



TITLE XVI— HOUSING GOALS AND ANNUAL HOUSING 

REPORT 

REAFFIRM ATIOX OF GOAL 

Sec. 1601. (a) ^ The Congress finds that the supply of the Nation's 
housing is not increasing rapidly enough to meet the national housing 
goal, established in the Housing Act of 1949. of the ''realization as soon 
as feasible of the goal of a decent home and a suitable living environ- 
ment for every American family". The Congress reaffirms this national 
housing goal and determines that it can be substantial! v achieved 



1 Sec. SOl(l) of Housinc and Community Development Act of 1974, Public Law 93-383, 
88 Stat. 633, approved August 22, 1974, inserted (a) following sec. 1601. 



§1602 NATIONAL HOUSING GOALS 

within the next decade by the construction or rehabilitation of twenty- 
six million housing units, six million of these for low and moderate 
income families. 

(b) The Congress further finds that policies designed to contribute 
to the achievement of the national housing goal have not directed 
sufficient attention and resources to the preservation of existing hous- 
ing and neighborhoods, that the deterioration and abandonment of 
housing for the Nation's lower income families has accelerated over 
the last decade, and that this acceleration has contributed to neigh- 
borhood disintegration and has partially negated the progress toward 
achieving the national housing goal which has been made primarily 
through new housing construction. 

(c) The Congress declares that if the national housing goal is 
to be achieved, a greater effort must be made to encourage the preserva- 
tion of existing housing and neighborhoods through such measures 
as housing preservation, moderate rehabilitation, and improvements 
in housing management and maintenance, in conjunction with the 
provision of adequate municipal services. Such an effort should con- 
centrate, to a greater extent than it has in the past, on housing and 
neighborhoods where deierioration is evident but has not yet become 
acute.^ 

REPORT OUTLIXIXG PLAX 

Sec. 1602. Not later than January 15, 1969, the President shall make 
a report to the Congress setting forth a plan, to be carried out over 
a period of ten years (June 30, 1968, to June 30, 1978), for the elimi- 
nation of all substandard housing and the realization of the goal 
referred to in section 1601. Such plan shall — 

(1) indicate the number of new or rehabilitated housing units 
which it is anticipated will have to be provided, with or without 
Government assistance, during each fiscal year of the ten-year 
period, in order to achieve the objectives of the plan, showing the 
number of such units which it is anticipated will have to be pro- 
vided under each of the various Federal programs designed to 
assist in the provision of housing ; 

(2) indicate the reduction in the number of occupied substand- 
ard housing units which it is anticipated will have to occur during 
each fiscal year of the ten-year period in order to achieve the 
objectives of the plan ; 

(3) provide an estimate of the cost of carrying out the plan for 
each of the various Federal programs and for each fiscal year 
during the ten-year period to the extent that such costs will be 
reflected in the Federal budget ; 

(4) make recommendations with respect to the legislative and 
administrative actions necessary or desirable to achieve the objec- 
tives of the plan ; and 

(5) provide such other pertinent data, estimates, and recom- 
mendations as the President deems advisalDle. 

Such report shall, in addition, contain a projection of the residential 
mortgage market needs and prospects during the coming year, includ- 



1 Sec. 801 r2) of Housing and Community Development Act of 1974 Public Law 93-383, 
88 Stat. 633, approved August 22, 1974, inserted new subsections (b) and (c). 



NATIONAL HOUSING GOALS §1603 

ing an estimate of the requirements with respect to the availability, 
need, and floAv of mortgage funds (particularly in declining urban 
and rural areas) during such year, together with such recorr^menda- 
tions as may be deemed appropriate for encouraging the availability 
of such funds. 

PERIODIC REPORTS 

Sec. 1603.^ Xot later than January 20 of each year, the President 
shall transmit to the Congress a report which — 

(1) reviews the progi-ess made in achieving housing production 
objectives during the preceding year, and in the event that pro- 
posed objectives are not achieved, identities the reasons for the 
failure ; 

(2) projects the level, composition, and general location of 
production and rehabilitation activity during the current year, 
and reassesses the availability of required resources; 

(3) specifies Federal programs and policies to be implemented 
or reconunended in order to achieve the objective; 

(4) updates estimates of the housing needs of lower income 
families, analyzing these needs, insofar as possible, by type of 
household, housing need, including households with specialized 
needs, and general location, and in addition, reassesses the capac- 
ity of each Federal housing program to serve the needs identified; 

(5) reviews the progress made in achieving goals of conserving 
and upgrading older housing and neighborhoods, expanding 
homeownership and equal housing opportunities, and assuring 
reasonable shelter costs ; 

(6) reports on progi-ess made toward developing new methods 
for measuring and monitoring progress in achieving these goals; 
and 

(7) identifies legislative and administrative actions which will 
or should be adopted or implemented during the current year to 
support achievement of the goals. 



1 Amended by Sec. 906, Housing and Community Development Amendments of 1978. 
Public Law 95-557, 92 Stat. 2080, approved October 31, 1978. The provision formerly read 
as follows : 

PERIODIC REPORTS 

Sec. 1603. On February 15. 1970, and on each succeeding year through 1979, the Presi- 
dent shall submit to the Congress a report which shall — 

(1) compare the results achieved during the preceding fiscal year for the comple- 
tion of new or rehabilitated housing units and the reduction in occupied substandard 
housing with the objectives established for such year under the plan : 

(2) if the comparison provided under clause (1) shows a failure to achieve the 
objectives set for such year, indicate (A) the reasons for such failure; (B) the 
steps being taken to achieve the objectives of the plan during each of the remaining 
fiscal years of the ten-year period ; and (C) any necessary revision in the objectives 
established under the plan for each such year : 

(3) provide an assessment of developments and progress during the preceding fiscal 
year with respect to the preservation of deteriorating housing and neighborhoods and 
indicate the efforts to he undertaken in future years to encourage such action :♦ 

(4) project residential mortgage market needs and prospects for the coming calen- 
dar year including an estimate of the requirements with respect to the availability, 
need, and flow of mortgage funds (particularly in declining urban and rural areas) 
during such period, in order to achieve the objectives of the plan : 

(5) provide an analysis of the monetary and fiscal policies of the Government for 
the coming calendar year required to achieve the objectives of the plan and the im- 
pact upon the domestic economy of achieving the plan's objectives for such period : 

(6) make recommendations with respect to any additional legislative or administra- 
tive action which is necessary or desirable to achieve the objectives of the plan ; and 

(7) provide such other pertinent data, estimates, and recommendations as the 
President deems advisable. 

•Sec. 801(3) of Housing and Community Development Act of 1974. Public Law 93-383. 
88 Stat. 633, approved August 22, 1974, redesignated paragraphs (3) through (6) as "(4)" 
through "(7)", and inserted a new paragraph (3). 



§802 and §817 NATIONAL HOUSING GOALS 

* * * Ht H: 

Approved August 1, 1968. 



EXCERPT FROM DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT ACT 

[Public Law 89-174, 79 Stat. 667, 670, 42 U.S.C. 3536] 

Sec. 8. The Secretary shall, as soon as practicable after the end of 
each calendar year, make a report to the President for submission to 
the Congress on the activities of the Department during the preceding 
calendar year. 

* * * ♦ He * « 

Approved September 9, 1965. 



EXCERPTS FROM HOUSING ACT OF 1954 

[Public Law 560, 83d Congress, 68 Stat. 590, 642, 12 U.S.C. 1701o] 

Sec. 802.^ (a) The Secretary of Housing and Urban Development 
shall, as soon as practicable during each calendar year, make a report 
to the President for submission to the Congress on all operations and 
programs (including but not limited to the insurance, urban renewal, 
public housing, and rent supplement programs) under the jurisdiction 
of the Department of Housing and Urban Development during the 
previous calendar year. Such report shall contain recommendations 
for strengthening or improving such programs, or, when necessary to 
implement more effectively Congressional policies and purposes, for 
establishing new or alternative programs. 



REPORT TO CONGRESS OF INFORMATION ON HOUSING 

Sec. 817. The annual report made by the Secretary of Housing and 
Urban Development to the President for submission to the Congress 
on all operations provided for by section 802 hereof shall contain 
pertinent information with respect to all projects for which any loan, 
contribution, or grant has been made by the Department of Housing 
and Urban Development, including the amount of loans, contributions 
and grants contracted for, and shall also contain pertinent information 
with respect to all builders' cost certifications required by section 227 
of the National Housing Act, as amended, including information as 
to the amounts paid by mortgagors to mortgagees for application to 

1 Prior to amendment by sec. 1101. Housing and Urban Development Act of 1965, Public 
Law 89-117, approved August 10, 1965, 79 Stat. 451, 502, sec. 802(a) read as follows: 
"(a) The Housing and Home Finance Administrator shall, as soon as practicable during 
each calendar year, make a report to the President for submission to the Congress on all 
operations under the jurisdiction of the Housing and Home Finance Agency during the 
previous calendar year." 

Sec. 10, Public Law 90-19, approved May 25, 1967, 81 Stat. 17, 22, substituted "Secre- 
tary of Housing and Urban Development" for "Housing and Home Finance Administrator" 
and "Department of Housing and Urban Development" for "Housing and Home Finance 
Agency" in order to make this section and other sections in this act conform to the Depart- 
ment of Housing and Urban Development Act which placed all the functions of the Hous- 
ing and Home Finance Administrator in the Secretary of Housing and Urban Development. 

See also sec. 7(b), United States Housing Act of 1937. 



NATIONAL HOUSING GOALS §817 

the reduction of the principal obligations of the mortgages pursuant 
to that section. 

m ***** * 

Approved August 2, 1954. 



§2 

DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT ACT 

[Public Law 89-174, 79 Stat. 667; 42 U.S.C. 3531] 

AN ACT To establish a Department of Housing and Urban Development, and 

for other purposes. 

Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assemhled. That this Act may 
be cited as the "Department of Housing and Urban Development Act". 

DECLARATION OF PURPOSE 

Sec. 2. The Congress hereby declares that the general welfare and 
security of the Xation and the health and living standards of our peo- 
ple require, as a matter of national purpose, sound development of the 
Nation's communities and metropolitan areas in which the vast ma- 
jority of its people live and work. 

To carry out such purpose, and in recognition of the increasing 
importance of housing and urban development in our national life, the 
Congress finds that establishment of an executive department is desir- 
able to achieve the best administration of the principal programs of 
the Federal Government which provide assistance -for housing and 
for the development of the Nation's communities: to assist the Presi- 
dent in achieving maximum coordination of the various Federal ac- 
tivities which have a major effect upon urban community, suburban, 
or metropolitan development ; to encourage the solution of problems of 
housing, urban development, and mass transportation through State, 
county, town, village, or other local and private action, including 
promotion of interstate, regional, and metropolitan cooperation: to 
encourage the maximum contributions that may be made by vigorous 
private homebuilding and mortgage lending industries to housing, 
urban development, and the national economy; and to provide for full 
and appropriate consideration, at the national level, of the needs and 
interests of the Nation's communities and of the people who live and 
work in them. 

ESTABLISHMENT OF DEPARTMENT 

Sec. 3. (a) There is hereby established at the seat of government 
an executive department to be known as the Department of Housing 
and Frban Development (hereinafter referred to as the ''Depart- 
ment"). There shall l)e at the head of the Department a Secretary 
of Housing and Urban Development (hereinafter referred to as the 
''Secretary"), who shall be appointed by the President by and with 
the advice and consent of the Senate. The Department shall be ad- 
ministered under the supervision and direction of the Secretary.^ 

1 Public Law 90-83. approved Sept. 11. 1967, 81 Stat. 195. repealed provisions of the 
Department Act relating to salaries of the Secretary and other officials. See 5 U.S.C. 
5311, et seq., for salaries of these officers. 



45-704 - -'9 - 



§4 DEPARTMENT OF HUD ACT 

(b) The Secretary shall, among his responsibilities advise the Pres- 
ident with respect to Federal programs and activities relating to hous- 
ing and urban development ; develop and recommend to the President 
policies for fostering the orderly growth and development of the 
Nation's urban areas ; exercise leadership at the direction of the Presi- 
dent in coordinating Federal activities affecting housing and urban 
development ; provide technical assistance and information, including 
a clearinghouse service to aid State, county, town, village, or other 
local governments in developing solutions to community and metro- 
politan development problems ; consult and cooperate with State Gov- 
ernors and State agencies, including, when appropriate, holding 
informal public hearings, with respect to Federal and State programs 
for assisting communities in developing solutions to community and 
metropolitan development problems and for encouraging effective re- 
gional cooperation in the planning and conduct of community and 
metropolitan development programs and projects; encourage compre- 
hensive planning by the State and local governments with a view to 
coordinating Federal, State, and local urban and community develop- 
ment activities; encourage private enterprise to serve as large a part 
of the Nation's total housing and urban development needs as it can 
and develop the fullest cooperation w^ith private enterprise in achiev- 
ing the objectives of the Department; and conduct continuing com- 
prehensive studies, and make available findings, with respect to the 
problems of housing and urban development. 

(c) Nothing in this Act shall be construed to deny or limit the bene- 
fits of any program, function, or activity assigned to the Department 
by this or any other Act to any community on the basis of its popula- 
tion or corporate status, except as may be expressly provided by law. 

UNDER SECRETARY AND OTHER OFFICERS AND OFFICES 

Sec. 4. (a) There shall be in the Department an Under Secretary, 
eight ^ Assistant Secretaries, and a General Counsel, who shall be ap- 
pointed by the President by and with the advice and consent of the 
Senate, and who shall perform such functions, powers, and duties as 
the Secretary shall prescribe from time to time. There shall be in the 
Department a Federal Housing Commissioner, who shall be one of 
the Assistant Secretaries, who shall head a Federal Housing Admin- 
istration within the Department, who shall have such duties and pow- 
ers as may be prescribed by the Secretary, and who shall administer, 
under the supervision and direction of the Secretary, departmental 
programs relating to the private mortgage market. 

(b) 2 There shall be in the Department a Director of Urban Program 
Coordination, who shall be designated by the Secretary. He shall as- 



iSec. 808, 1968 Civil Rights Act, Public I^aw 90-284, approved Apr. 11. 1968, 82 Stat. 
73, 84, provided that the Department should be provided an additional Assistant Secretary, 
and substituted "five" for "four". Sec. 1708, Housing and Urban Development Act of 1968, 
Public Law 90-448, approved Aug. 1, 1968, 82 Stat. 476. 606, substituted "six" for "five". 
Sec. 818(a)(1) of Housing and Community Development Act of 1974, Public Law 93-383, 
88 Stat. 633, approved Aug. 22, 1974, substituted "eight" for "six". 

■Sec. 818(a)(2) of Housing and Community Development Act of 1974, Public Law 
93-383. 88 Stat. 633, approved August 22, 1974, deleted subsection (b). Prior to enact- 
ment this subsection read as follows : There shall be In the Department an Assistant 
Secretary for Administration, who shall be appointed, with the approval of the President, 
by the Secretary under the classified civil service, who shall perform such functions, 
powers, and duties as the Secretary shall prescribe from time to time. 

Sec. 818(a)(3) of Housing and Community Development Act of 1974, Public Law 
93-383. 88 Stat. 633, approved August 22, 1974, redesignated subsections (c) and (d) as 
subsections (b) and (c). 

10 



DEPARTMENT OF HUD ACT §5 

sist the Secretary in carrying out his responsibilities to the President 
with respect to achieving maximum coordination of the programs of 
the various departments and agencies of the Government which have 
a major impact on community development. In providing such as- 
sistance, the Director shall make such studies of urban and community 
problems as the Secretary shall request, and shall develop recommen- 
dations relating to the administration of Federal programs affecting 
such problems, particularly with respect to achieving effective coopera- 
tion among the Federal, State, and local agencies concerned. Subject 
to the direction of the Secretary, the Director shall, in carrying out 
his responsibilities, (1) establish and maintain close liaison with the 
Federal departments and agencies concerned, and (2) consult with 
State, local, and regional officials, and consider their recommendations 
with respect to such programs. 

(c) ^ There shall be in the Department an Assistant to the Secretary, 
designated by the Secretary, who shall be responsible for providing 
information and advice to nonprofit organizations desiring to sponsor 
housing projects assisted under programs administered by the Depart- 
ment. 

(d)(1) There shall be in the Department a Special Assistant for 
Indian and Alaska Xativo Programs, who shall be responsible for 
coordinating all programs of the Department relating to Indian and 
Alaska Xative housing and community development. The Special 
Assistant for Indian and Alaska Xative Programs shall be designated 
by the Secretary not later than 60 days after the date of enactment 
of this subsection. 

(2) The Secretary shall, not later than December 1 of each year, 
submit to Congress an annual report which shall include — 

(A) a description of his actions during the current year and 
a projection of his activities during the succeeding years; 

(R) estimates of the cost of the projected activities for suc- 
ceeding fiscal years; 

(C) a statistical report on the conditions of Indian and Alaska 
Xative housing and 

(D) recommendations for such legislative, administrative, and 
other actions, as he deems appropriate.^ 

TRANSFERS TO DEPARTMENT 

Sec. 5. (a) Except as otherwise provided in subsection (b) of this 
section, there are hereby transferred to and vested in the Secretary all 
of the functions, powers, and duties of the Housing and Home Finance 
Agency, of the Federal Housing Administration and the Public Hous- 
ing Administration in that Agency, and of the heads, and other officers 
and offices of said agencies. 

(b) The Government ^ National Mortgage Association, together 
with its functions, powers, and duties, is hereby transferred to the De- 
partment. The next to the last sentence of section 308 of the Federal 
National Mortgage Association Charter Act is hereby repealed. 

(c) The President shall undertake studies of the organization of 
housing and urban development functions and programs within the 

1 Added by Sec. 917, Housing and Urban Development Act of 1970, Public Law 91-609, 
approved December 31. 1970, 

- Housing and Community Development Act of 1977, Public Law 95-128. approved 
Oct. 12, 1977, amended section 4 by adding at the end thereof a new subsection (d). 

3 Sec. 807(c), Housing and Urban Development Act of 1968. Public Law 90-448, approved 
Aug. 1. 1968. 82 Stat. 476, 544. substituted "Govemmpnt" for "Federal". 

11 



§6 DEPARTMENT OF HUD ACT 

Federal Government, and he shall provide the Congress with the find- 
ings and conclusions of such studies, together with his recommenda- 
tions regarding the transfer of such functions and programs to or from 
the Department. Notwithstanding any other provision of this Act, 
none of the functions of the Secretary of the Interior authorized under 
the Land and Water Conservation Fund Act of 1965 (78 Stat. 897) 
or other functions carried out by the Bureau of Outdoor Kecreation 
shall be transferred from the Department of the Interior or in any 
way be limited geographically unless specifically provided for by re- 
organization plan pursuant to provisions of the Reorganization Act 
of 1949 (63 Stat. 203) , as amended, or by statute. 

CONFORMING AMENDMENTS 

Sec. 6. (a) Section 19(d) (1) of title 3 of the United States Code 
is hereby amended by striking out the period at the end thereof and 
inserting a comma and the following: "Secretary of Health, Educa- 
tion, and Welfare, Secretary of Housing and Urban Development." 

(b) Section 158 of the Revised Statutes (5 U.S.C. 1) is amended 
by adding at the end thereof : 

"Eleventh. The Department of Housing and Urban Development." 
Repealed.^ 

(c) The amendment made by subsection (b) of this section shall not 
be construed to make applicable to the Department any provision of 
law inconsistent with this Act. 

ADMINISTRATIVE PROVISIONS 

Sec. 7. (a) The personnel employed in connection with, and the 
assets, liabilities, contracts, property, records, and unexpended bal- 
ances of appropriations authorizations, allocations, or other funds 
held, used, arising from, or available or to be made available in con- 
nection with, the functions, powers, and duties transferred by section 
5 of this Act are hereby transferred with such functions, powers, and 
duties, respectively. 

(b) No transfer of functions, powers, and duties shall at any time 
be made within the Department in connection with the secondary 
market operations of the Federal National Mortgage Association un- 
less the Secretary finds that the rights and interests of owners of 
outstanding common stock issued under the Federal National Mort- 
gage Association Charter Act will not be adversely affected thereby. 
Repealed.^ 

(c) The Secretary is authorized, subject to the civil service and 
classification laws, to select, appoint, employ, and fix the compensation 
of such officers and employees, including attorneys as shall be neces- 
sary to carry out the provisions of this Act and to prescribe their 
authority and duties: Provided^ That any other provision of law to 
the contrary notwithstanding, the Secretary may fix the compensa- 



iSec. 10(b), Public Law 90-83. approved Sept. 11. 1967. Stat. 195. 233. ^ppe^led 
sec. 6(b). However, in sec. 10(b) of the Department of Transportation Act. Public Law 
89-670, approved October 15, 1966. 80 Stat. 931. Q48. the Department of Housinc and 
Urban Development was included in the recodified :iection 101 of title 5, United States 
Code. 

2 Sec. 807(d), Housing and Urban Development Act of 1968, Public Law 90-448, ap- 
proved Aug. 1, 1968, 82 Stat. 476, 544, repealed section 7(b). 



12 



DEPARTMENT OF HUD ACT §7 

tion for not more than six ^ positions in the Department at the an- 
nual rate applicable to positions in level V of the Federal Executive 
Salary Schedule provided by the Federal Executive Salary Act of 
1964. 

(d) The Secretary may delegate any of his functions, powers, and 
duties to such officers and employees of the Department as he may 
designate, may authorize such successive redelegations of such func- 
tions, powers, and duties as he may deem desirable, and may make 
such rules and regulations as may be necessary to carr}' out his func- 
tions, powers, and duties. The second proviso of section 101(c) of 
the Housing Act of 1949 is hereby repealed. 

(e) The Secrctarv may obtain services as authorized by section 15 
of the Act of August 2, 1946, at rates for - individuals not to exceed 
the per diem equivalent to the highest rate for grade GS-18 of the Gen- 
eral Schedule under section 5332 of title 5, United States Code. 

(f ) The Secretary is authorized to establish a working capital fund, 
to be available without fiscal year limitation, for expenses necessary 
for the maintenance and operation of such common administrative 
services as he shall find to be desirable in the interest of economy and 
efficiency in the Department, including such services as a central supply 
service for stationery and other supplies and equipment for which 
adequate stocks may be maintained to meet in whole or in part the 
requirements of the Department and its agencies; central mes?;enger, 
mail, telephone, and other communications services; office space; cen- 
tral services for document reproduction and for graphics and visual 
aids; and a central library service. In addition to amounts appro- 
priated to provide capital for said fund, which appropriations are 
hereby authorized, the fuiul shall be capitalized oy transfer to it of 
such stocks of supplies and equipment on hand or on order as the 
Secretary shall direct. Such funds shall be reimbursed from available 
funds of aijencies and offices in the Department for which services are 
performed at rates which will return in full all expenses of operation, 
including reserves for accrued annual leave and for depreciation of 
equipment. 

(g) The Secretary shall cause a seal of office to be made for the 
Department of such device as he shall approve, and judicial notice 
shall be tnken of such seal. 

(h) ^ Except as such authority is otherwise expressly provided in 
any other Act administered by the Secretary, such financial transac- 
tions of the Secretary as the making of loans or grants (and vouchers 
approved by the Secretary in connection with such financial transac- 
tions) shall be final and conclusive upon all officers of the Government. 
Funds made available to the Secretary pursuant to any provision of 
law for such financial transactions shall be deposited in a checkins: 
account or accounts with the Treasurer of the United States. Such 
funds and any receipts and assets obtained or held by the Secretary 

1 Spc. .SOS (in. 1968 Civil Rights Act. Public Law 90-284. approved Apr. 11. 1968. 82 Stat. 
73. 84. sub.stituted "seven" for "six". Sec. 17(d) of t:;e Housiner Authorization Act of 
1976. P'iblic Law 94-.375. apnroved August 3. 1976. 90 Stat. 1067. amended section 7(c) 
of tbe Department of Housing and Urban Development Act by striking "seven" and In- 
serting in lieu thereof "six". 

2 Sec-. 906. Housinc nnd Urban Development Act of 1970. Public Law 91-609. approved 
December 31. 1970. 84 Stat. 1770. 1811. amended the reniainder of this sentpnre to increase 
the maximum amount payable to consultants from $100 per diem to the daily equivalent 
to thp hi^bpcf ntp for OS-IS. 

3 Sec. 90"). Housing anc] Urban Development Act of 1970. Public Law 91-609. approved 
December 31, 1970, 84 Stat. 1770, 1809, 1810, added subsections (h) to (1) Inclusive. 

13 



§7 



DEPARTMENT OF HUD ACJT 



in connection with such financial transactions shall be available, in 
such amounts as may from year to year be authorized by the Congress, 
for the administrative expenses of the Secretary in connection with 
such financial transactions. Notwithstanding the provisions of any 
other lawy the Secretary may, with the approval of the Comptroller 
General, consolidate into one or more accounts for banking and check- 
ing purposes all cash obtained or held in connection with such financial 
transactions, including amounts appropriated, from whatever source 
derived. 

(i) Except as such authority is otherwise expressly provided in any 
other Act administered by the Secretary, the Secretary is authorized 
to— 

(1) foreclose on any property or commence any action to 
protect or enforce any right conferred upon him by any law, con- 
tract, or other agreement, and bid for and purchase at any 
foreclosure or any other sale any property in connection with 
which he has made a loan or grant. In the event of any such 
acquisition, the Secretary may, notwithstanding any other provi- 
sion of law relating to the acquisition, handling, or disposal of 
real property by the United States, complete, administer, remodel 
and convert, dispose of, lease, and otherwise deal with, such prop- 
erty : Provided, That any such acquisition of real property shall 
not deprive any State or political subdivision thereof of its civil 
or criminal jurisdiction in and over such property or impair the 
civil rights under the State or local laws of the inhabitants on 
such property: Provided further. That section 3709 of the 
Revised Statutes shall not apply to any contract for services or 
supplies on account of any property so acquired or owned if the 
amount of such contract does not exceed $2,500 ; 

(2) enter into agreements to pay annual sums in lieu of taxes 
to any State or local taxing authority with respect to any real 
property so acquired or oAvned ; 

(3) sell or exchange at public or private sale, or lease, real or 
personal property, and sell or exchange any securities or obliga- 
tions, upon such terms as he may fix ; 

(4) obtain insurance against loss in connection with property 
and other assets held ; 

(5) consent to the modification, with respect to the rate of 
interest, time of payment of any installment of principal or inter- 
est, security, or any other term of any contract or agreement to 
which he is a party or which has been transferred to him ; and 

(6) include in any contract or instrument such other covenants, 
conditions, or provisions as he may deem necessary. 

(j) Notwithstanding any other provision of law the Secretary is 
authorized to establish fees and charges, chargeable against program 
beneficiaries and project participants, which shall be adequate to cover 
over the long run, costs of inspection, project review and financing 
service, audit by Federal or federally authorized auditors, and other 
beneficial rights, privileges, licenses, and services. Such fees and 
charges heretofore or hereafter collected shall be considered non- 
administrative and shall remain available for operating expenses of 
the Department in providing similar services on a consolidated basis. 

(k) (1) The Secretary is authorized to accept and utilize voluntary 
and uncompensated services and accept, hold, administer, and utilize 

14 



DEPARTMENT OF HUD ACT §7 

gifts and bequests of property, both real and personal, for the pur- 
pose of aiding or facilitating the work of the Department. Gifts and 
bequests of money and the proceeds from sales of other property 
received as gifts or bequests shall be deposited in the Treasury m a 
separate fund and shall be disbursed upon order of the Secretary. 
Property accepted pursuant to this paragraph, and the proceeds 
thereof,' shall be used as nearly as possible in accordance with the 
terms of the gift or bequest. 

(2) For the purpose of Federal income, estate, and gift taxes, 
property accepted under paragraph (1) shall be considered as a gift 
or bequest to or for use of the United States. 

(3) Upon the request of the Secretary, the Secretary of the Treas- 
ury may invest and reinvest in securities of the United States or in 
securities guaranteed as to principal and interest by the United States 
any monevs contained in the fund provided for in paragraph (1). 
Income accruing from such securities and from any other property 
held by the Secretary pursuant to paragraph (1) shall be deposited 
to the credit of the fund and shall be disbursed upon order of the 
Secretary. 

(1) The Secretary is authorized to appoint, without regard to the 
civil service laws, such advisory committees as shall be appropriate 
for the purpose of consultation with and advice to the Department in 
performance of its functions. Members of such committees, other than 
those regularly employed by the Federal Government, while attend- 
ing meetings of such committees or otherwise serving at the request 
of the Secretary, may be paid compensation at rates not exceeding 
those authorized for individuals under subsection (e) of this section, 
and while so serving away from their homes or regular places of 
business, may be allowed travel expenses, including per diem in lieu 
of subsistence, as authorized by section 5703 of title 5, United States 
Code, for persons in tlie Government service employed intermittently. 

(m) ^ Whenever he shall determine that, because of location, or 
other considerations, any rental housing project assisted under title II 
of the National Housing Act or title I of the Housing and Urban 
Development Act of 1965 could ordinarily be expected substantially 
to serve the family housing needs of lower income military personnel 
serving on active duty, the Secretary is authorized to provide for or 
approve such preference or priority of occupancy of such project by 
such military personnel as he shall determine is appropriate to assure 
that the project will serve their needs on a continuing basis notwith- 
standing the frequency with which individual members of such per- 
sonnel may be transferred or reassigned to new duty stations. 

(n)- Notwithstanding any other provision of law, the Secretary 
is authorized by contract or otherwise to establish, equip, and operate 
a day care center facility or facilities, or to assist in establishing, 

1 Sec. 120(c). Housing and Urban Development Act of 1970, Public Law 91-609, approved 
December 31, 1970, S4 Stat. 1770. 177.'). 177G. added subsection (m). 

= Sec. 21 (.f the Housinjr Authorization Act of 1970. Public Law 94-375. approved 
Aupiist 3. 197G, 90 Stat. 10G7. amended section 7 of the Department of Housing and 
Urban Development Act by inserting a new subsection (n). This was further amended by 
section 316. Housing and Community Development Amendments cf 197S, P.L. 9r)-rj57. 
92 Stat. 2080, approved October 31, 197S. The previous subsection read as follows : 

Notwithstanding any other provision of law, the Secretary is authorized by contract 
or otherwise to establish, equip and operate a day care center facility for the purpose 
of serving children who are members of households of employees of the Department. 
The Secretary is authorized to establish or provide for the establishment of appropri- 
ate fees and charges to be chargeable against the Department of Housing and Urban 
Development employees or others who are beneficiaries of services provided by such a day 
care center. 

15 



§7 DEPARTMENT OF HUD ACT 

equipping, and operating interagency day care facilities for the pur- 
pose of serving children who are members of households of employees 
of the Department. The Secretary is authorized to establish or pro- 
vide for the establishment of appropriate fees and charges to be 
chargeable against the Department of Housing and Urban D'^velop- 
ment employees or others who are beneficiaries of services provided by 
any such day care center. In addition, limited start-up costs may be 
provided by the Secretary in an amount limited to 3 per centum of 
the first year's operating budget, but not to exceed $3,500. 

LEGISLATIVE REVIEW 

(o) ^ (1) Notwithstanding any other provision of law, the Secretary 
shall transmit to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Banking, Finance and 
Urban Affairs of the House of Representatives an agenda of all rules 
or regulations which are under development or review by the Depart- 
ment. Such an agenda shall be transmitted to such Committees within 
30 days of the date of enactment of this subsection and at least semi- 
annually thereafter. 

(2) (A) Any rule or regulation which is on any agenda submitted 
under paragraph (1) may not be published for comment prior to or 
during the first period of 15 calendar days of continuous session of 
Congress which occurs after the date on which such ag-enda was trans- 
mitted. If within such period, either Committee notifies the Secretary 
in writing that it intends to review any rule or regulation or portion 
thereof which appears on the agenda, the Secretary shall submit to 
both Committees a copy of any such rule or regulation, in the form it 
is intended to be proposed, at least 15 calendar days of continuous 
session prior to its being published for comment in the Federal 
Register. 

(B) Any rule or regulation which has not been published for com- 
ment before the date of enactment of this subsection and which does 
not appear on an agenda submitted under paragraph ( 1 ) shall be sub- 
mitted to both such Committees at least 15 calendar days of continu- 
ous session of Congress prior to its being published for comment. 

(3) No rule or regulation may become effective until after the 
first period of 20 calendar days of continuous session of Congress 
which occurs after the day on which such rule or regulation is pub- 
lished as final. If within such 20-day period, either Committee has 
reported out or been discharged from further consideration of a joint 
resolution of disapproval or other legislation which is intended to 
modify or invalidate the rule or regulation or any portion thereof, the 
rule or regulation or portion thereof so addressed shall not become 
effective for a period of 90 calendar days from the date of Committee 
action or discharge unless the House to which such Committee reports 
has rejected such resolution or legislation, in which case the rule or 
regulation may go into effect only after the expiration of the 20 calen- 
dar days described in the first sentence of this paragraph if the other 
House does not have such a resolution or legislation pending or 
adopted, and if the requirements of section 553 of title 5, United States 
Code, are met. 

1 Subsection (o) was added by sec. 324, Housing and Community Development Amend- 
ments of 1978, Public Law 95-557, 92 Stat. 2080, approved Oct. 31, 1978. 

16 



DEPARTMENT OF HUD ACT §8 

(4) The provisions of paragraphs (2) and (3) may be waived 
upon the written request of the Secretary, if agreed to by the Chairmen 
and Ranking Minority Members of both Committees. 

(5) Congressional inaction on any rule or regulation shall not be 
deemed an expression of approval of the rule or regulation involved. 

(6) For purposes of this subsection — 

(A) continuity of session is broken only by an adjournment 
of Congress sine die ; 

(B) the days on which either House is not in session because 
of an adjournment of more than 3 days to a day certain are 
excluded in the computation of calendar days of continuous session 
of Congress ; and 

(C) the term "rule or regulation" does not include the setting 
of interest rates pui-suant to section 3 of Public Law 90-301. 

CX)ST-BENEFIT ANALYSIS OF FIELD REORGANIZATIONS 

(p) ^ A plan for the reorganization of any regional, area, insuring, 
or other field office of the Department of Housing and Urban Develop- 
ment may take effect only upon the expiration of 90 days after publica- 
tion in the Fcdei'al Register of a cost -benefit analysis of the effects of 
the plan on each office involved. Such cost-benefit analysis shall include, 
but not be limited to — 

(1) an estimate of cost savings supported by the background in- 
formation detailing the source and substantiating the amount of 
the savings ; 

(2) an estimate of the additional cost which will result from the 
reorganization ; 

(3) a study of the impact on the local economy; and 

(4) an estimate of the effect of the reorganization on the avail- 
ability, accessibility, and quality of services provided for recipi- 
ents of those services. 

where any of the above factors cannot be quantified, the Secretary 
shall provide a statement on the nature and extent of those factors in 
the cost-benefit analysis. 

ANNUAL REPORT 

Sec. 8. The Secretary shall, as soon as practicable after the end 
of each calendar year, make a report to the President for submission 
to the Congress on the activities of the Department during the pre- 
ceding calendar year. 

SAVINGS PROVISIONS 

Sec. 9. (a) No cause of action by or against any agency whose 
functions are transferred by this Act, or by or against any officer of 
any agency in his official capacity, shall abate by reason of this en- 
actment. Such causes of action may be asserted by or against the 
United States or such official of the Department as may be appropriate. 

(b) No suit, action, or other proceeding commenced by or against 
any agency whose functions are transferred by this Act, or by or 
against any officer of any such agency in his official capacity, shall 
abate by reason of the enactment of this Act. A court may at any 
time during the pendency of the litigation, on its own motion or that 

1 Added bv Sec. 908. Housing and Community Development Amendments of 1978, P.L. 
9r)-557, 92 Stat. 2080, approved October 31. 1978. 

17 



§ 11 . DEPARTMENT OF HUD ACT 

of any party, order that the same may be maintained by or against 
the TJnited States or such official of the Department as may be 
appropriate. 

(c) Except as may be otherwise expressly provided in this Act, all 
powers and authorities conferred by this Act shall be cumulative and 
additional to and not in derogation of any powers and authorities 
otherwise existing. All rules, regulations, orders, authorizations, dele- 
gations, or other actions duly issued, made, or taken by or pursuant 
to applicable law, prior to the effective date of this Act, by any agency, 
officer, or office pertaining to any functions, powers, and duties trans- 
ferred by this Act shall continue in full force and effect after the effec- 
tive date of this Act until modified or rescinded by the Secretary or 
such other officer or office of the Department as, in accordance with 
applicable law, may be appropriate. With respect to any function, 
power, or duty transferred by or under this Act and exercised here- 
after, reference in another Federal law to the Housing and Home 
Finance Agency or to any officer, office, or agency therein, except the 
Federal National Mortgage Association and its officers, shall be deemed 
to mean the Secretary. The positions and agencies heretofore estab- 
lished by law in connection with the functions, powers, and duties 
transferred under section 5(a) of this Act shall lapse. 

SEPARABILITY 

Sec. 10. Notwithstanding any other evidence of the intent of Con- 
gress, it is hereby declared to be the intent of Congress that if any 
provision of this Act, or the application thereof to any persons or 
circumstances, shall be adjudged by any court of competent jurisdic- 
tion to be invalid, such judgment shall not affect, impair, or invalidate 
the remainder of this Act or its application to other persons and cir- 
cumstances, but shall be confined in its operation to the provision of 
this Act, or the application thereof to the persons and circumstances, 
directly involved in the controversy in which such judgment shall have 
been rendered. 

EFFECTIVE DATE AND INTERIM APPOINTMENTS 

Sec. 11. (a) The provisions of this Act shall take effect upon the ex- 
piration of the first period of sixty calendar days following the date 
on which this Act is approved by the President,^ or on such earlier date 
as the President shall specify by Executive order published in the Fed- 
eral Register, except that any of the officers provided for in sections 
3(a), 4 (a), and l:(b) of this Act may be nominated and appointed, as 
provided in such sections, at any time after the date this Act is ap- 
proved by the President. 

(b) In the event that one or more officers required by this Act to be 
appointed, by and with the advice and consent, of the Senate, shall not 
have entered upon office on the effective date of this Act; the President 
may designate any person who was an officer of the Housing and Home 
Finance Agency immediately prior to said effective date to act in such 
office until the office is filled as provided in this xVct or until the expira- 
tion of the first period of sixty days following said effective date, 
whichever shall first occur. While so acting such persons shall receive 
compensation at the rates provided by this Act for the respective offic^ 
in which they act. 

Approved September 9, 1965. 

1 November 9. 1965. 

18 



ADMINISTRATION OF HUD PROGRAMS 



i 

Nil 

H 
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19 



§213 

ADMINISTRATION OF HUD PROGRAMS— POLICY 

DIRECTIVES 

EXCERPT FROM HOUSING AND COMMUNITY DEVELOPMENT 

ACT OF 1974 

[Public Law 93-383, 88 Stat. 633] 

LOCAL HOUSING ASSISTANCE PLANS ; ALLOCATION OF HOUSING FUNDS 

Sec. 213. (a)(1) The Secretary of Housing and Urban Develop- 
ment, upon receiving an application for housing assistance under the 
United States Housing Act of 1937. section 235 or 236 of the National 
Housing Act, section 101 of the Housing and Urban Development Act 
of 1965, or section 202 of tlie Housing Act of 1959, if the unit of gen- 
eral local government in wliich the proposed assistance is to be pro- 
vided has an approved housing assistance plan, shall — 

(A) not later than ten days after receipt of the application, 
notify the chief executive officer of such unit of general local gov- 
ernment that such application is under consideration; and 

(B) afford such unit of general local government the oppor- 
tunity, during the thirty-day period beginning on the date of 
such notification, to object to the approval of the application on 
the grounds that the application is inconsistent with its housing 
assistance plan. 

(2) If the unit of general local government objects to the applica- 
tion on the grounds that it is inconsistent with its housing assistance 
plan, the Secretary may not approve the application unless he deter- 
mines that the application is consistent with such housing assistance 
plan. If the Secretary determines, that such application is consistent 
with the housing assistance plan, he shall notify the chief executive 
officer of the unit of general local government of his determination 
and the reasons therefor in Avriting. If the Secretary concurs with the 
objection of the unit of local government, he shall notify the applicant 
stating the reasons therefor in writing. 

(3) If the Secretary does not receive an objection by the close of the 
period referred to in paragraph (1) (B), he may approve the applica- 
tion unless he finds it inconsistent with the housing assistance plan. If 
the Secretary determines that an application is inconsistent with a 
housing assistance plan, he shall notify the applicant stating the rea- 
sons therefor in writing. 

(4) The Secretary shall make the determinations referred to in 
paragraphs (2) and (3) within thirty days after he receives an objec- 
tion pursuant to paragraph (1) (B)' or within thirty days after the 
close of the period referred to in paragraph (1)(B), whichever is 
earlier. 

(5) As used in this section, the term "housing assistance plan" 
means a housing assistance plan submitted and approved under section 
104 of this Act or, in the case of a unit of general local government not 



21 



§213 ADMINISTRATION OF HUD PROGRAMS 

participating under title I of this Act, a housing plan approved by 
the Secretary as meeting the requirements of this section. 

(b) The provisions of subsection (a) shall not apply to — 

(1) applications for assistance involving 12 or fewer units in a 
single project or development; 

(2) applications for assistance with respect to housing in new 
community developments approved under title IV of the Housing 
and Urban Development Act of 1968 or title VII of the Housing 
and Urban Development Act of 1970 which the Secretary deter- 
niines are necessary to meet the housing requirements under such 
title; or 

(3) applications for assistance with respect to housing financed 
by loans or loan guarantees from a State or agency thereof, ex- 
cept that the provisions of subsection (a) shall apply where the 
unit of general local government in which the assistance is to be 
provided objects in its housing assistance plan to the exemption 
provided by this paragraph. 

(c) For areas in which an approved local housing assistance plan is 
not applicable, the Secretary shall not approve an application for hous- 
ing assistance unless he determines that there is a need for such assist- 
ance, taking into consideration any applicable State housing plans, 
and that there is or will be available in the area public facilities and 
services adequate to serve the housing proposed to be assisted. The 
Secretary shall afford the unit of general local government in which 
the assistance is to be provided an opportunity, during a 30-day period 
following receipt of an application by him, to provide comments or 
information relevant to the determination required to be made by the 
Secretary under this subsection. 

(d)(1) In allocating financial assistance under the provisions of law 
specified in subsection (a) of this section, the Secretary, so far as prac- 
ticable, shall consider the relative needs of different areas and com- 
munities as reflected in data as to population, poverty, housing over- 
crowding, housing vacancies, amount of substandard housing, or other 
objectively measurable conditions, subject to such adjustments as 
may be necessary to assist in carrying out activities designed to meet 
lower income housing needs as described in approved housing as- 
sistance plans submitted by units of general local government or 
combinations of such units assisted under section 107(a) (2) of this 
Act.^ The Secretary shall assure, to the maximum extent practicable 
in carrying out the national housing and community development 
objectives, that funds available for each housing assistance program 
referred to in subsection (a) shall be allocated or reserved in accord- 
ance with goals described in local. State, or other housing assistance 
plans approved by the Secretary pursuant to section 104, and shall be 
utilized to meet needs reflected in data referred to in the preceding 
sentence.^ The amount of assistance allocated to nonmetropolitan areas 
pursuant to this section in any fiscal year shall not be less than 20 nor 
more than 25 per centum of the total amount of such assistance. 

(2) In order to facilitate the provision of, and Jong-range planning 
for, housing for persons of low- and moderate-income in new commu- 
nity developments approved under title IV of the Housing and Urban 
Development Act of 1968 and title VII of the Housing and Urban 



^ This sentence added bv Housing and Community Development Act of 1977, Public Law 
95-128, approved Oct. 12, 1977. 

22 



ADMINISTRATION OF HUD PROGRAMS §817 

Development Act of 1970, the Secretary shall reserve such housing 
assistance funds as he deems necessary for use in connection with such 
new community developments. 

(3) The Secretary may reserve such housing assistance funds as he 
deems appropriate for use by a State or agency thereof. 

LIMITATIOX ON WITHHOLDING OR CX)NDITIONING OF ASSISTANCE 

Sec. 817. Assistance provided for in this Act, the National Housing 
Act, the United States Housing Act of 1937, the Housing Act of 1949, 
the Demonstration Cities and Metropolitan Development Act of 1966, 
and the Housing and Urban Development Acts of 1965, 1968, 1969, 
and 1970 shall not be withheld or made subject to conditions or pref- 
erence by reason of the tax-exempt status of bonds or other obligations 
issued or to be issued to provide financing for use in connection with 
such assistance, except where otherwise expressly provided or author- 
ized by law. 



MORTGAGE PROCEEDS FRAUDULENTLY MISAPPROPRIATED BY MORTGAGOR 

Sec. 819. The Secretary of Housing and Urban Development shall 
take action to secure the payment of any deficiency after foreclosure 
on a mortgage insured or assisted under Federal law where the Secre- 
tary has reason to believe that mortgage proceeds have been fraudu- 
lently misappropriated by the mortgagor. 

Approved August 22, 1974. 



Fraud and False Statements 
[18 U.S.C. § 1001] 

statements or entries generally 

Whoever, in any matter within the jurisdiction of any department 
or agency of the United States knowingly and willfully'falsifies, con- 
ceals or covers up by any trick, scheme, or device a material fact, or 
inakes any false, fictitious or fraudulent statements or representa- 
tions, or makes or uses any false writing or document knowing the 
same to contain any false, fictitious or fraudulent statement or entry, 
shall be fined not more than $10,000 or imprisoned not more than five 
years, or both. 

* * * * * * * 

[18 U.S.C. § 1010] 
department of housing and urban development and federal 

HOUSING administration TRANSACTIONS 

Whoever, for the purpose of obtaining any loan or advance of credit 
from any person, partnership, association, or corporation with the in- 
tent that such loan or advance of credit shall be offered to or accepted 
by the Department of Housing and I^rban Development for insurance, 
or for the purpose of obtaining any extension or renewal of any loan, 

23 



§348 ADMINISTRATION OF HUD PROGRAMS 

advance of credit, or mortgage insured by sucli Department, or the ac- 
ceptance, release, or substitution of any security on such a loan, ad- 
vance of credit, or for the purpose of influencing in any way the ac- 
tion of such Department, makes, passes, utters, or publishes any state- 
ment, knowing the same to be false, or alters, forges, or counterfeits 
any instrument, paper, or document, or utters, publishes, or passes as 
true any instrument, paper, or document, knowing it to have been al- 
tered, forged, or counterfeited, or willfully overvalues any security, as- 
set, or income, shall be fined not more than $5,000 or imprisoned not 
more than two years, or both. 



EXCERPT FROM THE YOUTH EMPLOYMENT AND DEMON- 
STRATION PROJECTS ACT OF 1977 

[Public Law 95-93, 95th Congress] 

* * * * * * * . 



"Sec. e348. (a)(1) The Secretary of Labor is authorized, either 
directly or by way of contract or other arrangement, with prime 
sponsors, public agencies and private organizations to carry out inno- 
vative and experimental programs to test new approaches for dealing 
w4th the unemployment problems of youth and to enable eligible j:)ar- 
ticipants to prepare for, enhance their prospects for, or secure employ- 
ment in occupations through which they may reasonably be expected 
to advance to productive working lives. Such programs shall include, 
where appropriate, cooperative arrangements with educational agen- 
cies to provide special programs and service for eligible participants 
enrolled in secondary schools, postsecondary educational institutions 
and technical and trade schools, including job experience, counseling 
and guidance prior to the completion of secondary or postsecondary 
education and making available occupational, educational, and train- 
ing information through statewide career information systems. 

"(2) In carrying out or supporting such programs, the Secretary 
of Labor shall consult, as appropriate, with the Secretary of Com- 
merce, the Secretary of Health, Education, and Welfare, the Secretary 
of Housing and LTrban Development, the Secretary of Afifriculture, 
the Director of the ACTION Agency, and the Director of the Com- 
munity Services Administration. 

"(3) Funds available under this section may be transferred to other 
Federal departments and agencies to carry out functions delegated to 
them pursuant to agreements with the Secretary. 

"(b) The Secretary and prime sponsors, as the case may be, shall 
give special consideration in carrying out innovative and experimental 
programs assisted under this section to community-based organiza- 
tions which have demonstrated effectiveness in the deliA-ery of employ- 
ment and training services, such as the Opportunities Industrializa- 
tion Centers, the National Urban League, SER-Jobs for Progress. 
Mainstream, Community Action Agencies, union-related organiza- 
tions, employer- related nonprofit organizations, and other similar 
organizations. 

24 



ADMINISTRATION OF HUD PROGRAMS §3 

"(c)(1) In carrying out its responsibilities under this subsection 
and under section 161 of the Vocational Education Act, the National 
Occupational Information Coordinating Committee shall give special 
attention to the problems of unemployed youths. The Committee shall 
also carry out other activities consistent with the purposes of this title, 
including but not limited to the following : 

"(A) assisting and encouraging local areas to adopt methods 
of translating national aggregate occupational outlook data into 
local terms ; 

"(B) Assisting and encouraging the development of State occu- 
]:>ational information systems, to be used in the maintenance of 
local job banks and job vacancy reports, accessible to local schools, 
and including pilot ])rograms in the use of computers to facilitate 
such access; 

"(C) in cooperation with State and local correctional agencies, 
encouraging proofi'ams of counseling and employment sen^ices for 
youtli in correctional institutions: 

"(D) providing teclmical assistance for programs of computer 
on-line terminals and other facilities to utilize and implement 
occupational and career outlook infonnation and projections sup- 
plied by State emplovment service offices and to improve the 
match of youth career desires with available and anticipated labor 
demand: 

"(E) in cooperation with Stare and local educational agencies, 
and other appropriate poisons and organizations, encouraging 
programs to make available employment and career counseling 
to presecondarv youths: and 

"(F) providing technical assistance for programs designed to 
encoui'age public and private employers to list all available job 
opportunities for youths with the appropriate eligible applicant 
conducting occupational information and career counseling pro- 
grams, local public employment services offices and to encourage 
cooperation and contact among such eligible apj)licants, em])loyers 
and offices. 
"(2) All funds available to the Xational Occupational Information 
Coordinating Committee under this Act and under section 161 of the 
Vocational Education Act may be used by the Committee to carry out 
any of its functions and responsibilities authorized by law. 

Ap])roved August 5, 1977. 



EXCERPT FROM HOUSING AND URBAN DEVELOPMENT ACT OF 1968 
[Public Law 90-448, 82 Stat. 476; 12 U.S.C. 1701u et seq.] 

KMPLOY:\rEXT OPPORTUXITIP^S FOR T.OWER INCOME PERSONS IN 
CONNECTION WITH ASSISTED PROJECTS 

Sec. 3.^ In the administration by the Secretary of Housing and 



1 ImmertlatPly prior to amendment bv sec. 404. Housing and Urban Development Act 
of 1960. Public Law 91-152. approved December 24, 1969, R3 Stat. 379. 395. the employ- 
ment and work opportunities requirements of this section 3 were limited to the adminis- 
tration of tlie section 235 homeownership program, the section 236 rental assistance 
program, the section 221(d)(3) below-niarltet interest-rate program, public housing, an^ 
the rent supplement procram. This amendment also deleted from the heading of section 3 
the words ".JOBS IN HOUSING". 

25 

1+5-704 0-79-3 



§4 ADMINISTRATION OF HUD PROGRAMS 

Urban Development of proo^rams providing direct financial assistance, 
including community development block grants under title I of the 
Housing and Community Development Act of 1974,2 in aid of housing, 
urban planning, development, redevelopment, or renewal, public or 
community facilities, and new community development, the Secretary 
shall — 

(1) require, in consultation with the Secretary of Labor, that 
to the greatest extent feasible opportunities for training and em- 
ployment arising in connection with the planning and carrying 
out of any project assisted under any such program be given to 
lower income persons residing in the area of such project; and 

(2) require, in consultation with the Administrator of the 
Small Business Administration, that to the greatest extent feasi- 
ble contracts for Avork to be performed in connection with any 
such project be awarded to business concerns, including but not 
limited to individuals or firms doing business in the field of plan- 
ning, consulting, design, architecture, building construction, reha- 
bilitation, maintenance, or repair, which are located in or owned 
in substantial part by persons residing in the area of such project. 



IMPR0\T:D ARCIIITECTUILVL design in government housing PROGRAMS 

Sec. 4. The Congress finds that Federal aids to housing have not 
contributed fully to improvement in architectural standards. This ob- 
jective has been contemplated in Federal housing legislation since the 
establishment of mortgage insurance through the Federal Housing 
Administration. 

The Congress commends the Department of Housing and Urban 
Development for its recent efforts to improve architectural standards 
through competitive design awards and in other ways but at the same 
time recognizes that this important objective requires high priority if 
Federal aid is to make its full communitywide contribution toward 
improving our urban environment. 

The Congress further finds that even within the necessary budget 
limitations on housing for low and moderate income families architec- 
tural design could be improved not only to make the housing more 
attractive, but to make it better suited to the needs of occupants. 

The Congress declares that in the administration of housing pro- 
grams which assist in the provision of housing for low and moderate, 
income families, emphasis should be given to encouraging good design 
as an essential component of such housing and to developing housing 
which will be of such quality as to reflect its important relationship to 
the architectural standards of the neighborhood and community in 
which it is situated, consistent with prudent budgeting. 



2 Sec. 118 of Housing and Community Development Act of 1974, Public Law 93-383, 
88 Stat. 633, approved August 22, 1974, amended this section. 



26 



, ADMINISTRATION OF HUD PROGRAMS § 201 and § 41- 

EXCERPT FROM HOUSING AND URBAN DEVELOPMENT ACT OF 1968 

[Public Law 90-448, 82 Stat. 476, 12 U.S.C. 1701u] 

TITLE II— RENTAL HOUSING FOR LOWER INCOME 

FAMILIES 

Part A — Private Housing 

RENTAL AND COOPERATIVE HOUSING FOR LOAVER INCOME FAMILIES 

Sec. 201. (a) Title II of the National Housing Act is amended by 
adding after section 235 (as added by section 101 of this Act) the 
following new section : ^ 

ilt ***** 4t 

(c) The Secretary of Housing and Urban Development is author- 
ized, upon such terms and conditions as he may prescribe, to transfer 
to section 236 (j) of the National Housing Act the insurance of a mort- 
gage which has not been finally endorsed for insurance under section 
221(d) (3) of such Act and which has been approved for the below- 
market interest rate prescribed in the proviso of section 221(d)(5) 
of such Act. 

(d) The Secretary of Housing and Urban Development is author- 
ized, upon such terms and conditions as he may prescribe, to insure 
under section 236(j) of the National Housing Act a mortgage meeting 
the requirements of such section which is given to refinance a mortgage 
loan made under section 202 of the Housinir Act of 1959: Prorided^ 
That the application for such insurance is filed with the Secretary on 
or before the date of project completion, or within such reasonable time 
thereafter as the Secretary may permit. 

******* 

Approved August 1, 1968. 



EXCERPT FROM HOUSING AND URBAN DEVELOPMENT 

ACT OF 1969 

[Public Law 91-152. 83 Stat. 400 ; 40 U.S.C. 484b] 

SALE OF LAND FOR HOUSING 

Sec. 414. (a) ^ Notwithstanding the provisions of the Federal Prop- 
erty and Administrative Services Act of 1949, any Federal surplus real 
property within the meaning of such Act may, in the discretion of the 



1 See sec. 236. National Housing Act. 

2 Sec. 919. Housing and Urban Development Act of 1970, Public Law 91-609. approved 
December 31, 1970, 84 Stat. 1770. 1816, amended section 414 to authorize the Adminis- 
trator of General Services to dispose of Federal surplus land to the Secretary of HUD 
for the construction of low- and moderate-income sales housing and related public 
commercial and industrial facilities. Immediately prior to this amendment the authoriza- 
tion for such disposal was limited to low- and moderate-income rental or cooperative 
liousing. Amended further by Sec. 317(a), Housing and Community Development Amend- 
ments of 1978, Public Law 95-557, 92 Stat. 2080, approved October 31, 1978. 

27 



§414 ADMINISTRATION OF HUD PROGRAMS . 

Administrator of General Services, be transferred to the Secretary of 
Housing and Urban Development at the Secretary's request for sale or 
lease by the Secretary at its fair value for use in the provision of hous- 
ing to be occupied predominantly by families or individuals of low and 
moderate income, assisted under a Federal housing assistance program 
administered by the Secretary or under a State or local program found 
by the Secretary to have the same general purpose, and for related 
public commercial or industrial facilities approved by the Secretary. 
Prior to any disposition of Federal surplus real property to an entity 
other than a public body, the Secretary shall notify the governing 
body of the locality where such property is located of the proposed 
disposition and no such disposition shall be made if the local governing 
body, within ninety days of such notification, formally advises the 
Secretary that it objects to the proposed disposition, unless the Secre- 
tary determines (1) that the proposed disposition would be consistent 
with any approved housing assistance and community development 
plans developed by such body pursuant to the Housing and Community 
Development Act of 1974, or (2) in cases where such plans are not 
available, that there is a need for low- and moderate-income housing 
taking into consideration any applicable State housing plans, and that 
there is or will be available in the area public facilities and services ade- 
quate to serve any housing proposed in conjunction with the proposed 
disposition. If the United States paid valuable consideration for any 
such land the Secretary shall not sell it for less than its cost to the 
United States at the time of acquisition. In addition, if such land 
contains improvements constructed by the Federal Government which 
have potential use in the provision of housing for low- or moderate- 
income families or individuals, the improvements shall be separately 
appraised for such use and the price for which such land is sold shall 
include an amount which is not less than the value of such improve- 
ments as so appraised. 

(b)^ As a condition of any disposition by the Secretary of Federal 
surplus real property under this section to an entity other than a public 
body, the Secretary shall obtain such undertakings as the Secretary 
may consider appropriate to assure that the property will be used, to 
the maximum practicable extent, in the provision of housing and 
related facilities to be occupied by families or individuals of low and 
moderate income for a period of not less than thirty years. If during 
such period the property is used for any purpose other than the pur- 
pose for which it was disposed of, it shall revert to the United States 
(or, in the case of leased property, the lease shall terminate) unless the 
Secretary and the Administrator, after the expiration of the first 
twenty years of such period, have approved the use of the property 
for such other purposes. 

Approved December 24, 1969. 



1 Amended by Sec. 317(b), Housing and Community Development Amendments of 1978, 
Public Law 95-557, 92 Stat. 2080, approved October 31, 1978. 



28 



CONGRESSIONAL BUDGET AND IMPOUNDMENT 
CONTROL ACT OF 1974 

[Public Law 93-344, 88 Stat. 297, 31 U.S.C. 1301] 

AX ACT To establish a new congressional budget process ; to establish Commit- 
tees on the Budget in each House ; to establish a Congressional Budget Office ; 
to establish a procedure providing congressional control over the impoundment 
of tuucVi by the executive branch ; and for other purposes. 

Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled^ 



Section 1. (a) Short Titles. — This Act may be cited as the "Con- 
gressional Budget and Impoundment Control Act of 1974". Titles I 
throuofh JX may be cited as the "Congressional Budget Act of 1974", 
and title X may be cited as the "Impoundment Control Act of 1974". 

(b) Table of Contents. — 

Sec. 1. Short titles ; table of contents. 
Sec. 2. Declaration of purposes. 
Sec. 3. Definitions. 

TITLE I— ESTABLISHMENT OF HOUSE AND SENATE 
BUDGET COMMITTEES 

Sec. 101. Budget Committee of the House of Representatives. 
Sec. 102. Budget Committee of the Senate. 

TITLE II— CONGRESSIONAL BUDGET OFFICE 

Sec. 201. Establishment of Office. 

Sec. 202. Duties and functions. 

Sec. 203. Public access to budget data. 

TITLE III— CONGRESSIONAL BUDGET PROCESS 

Sec. 300. Timetable. 

Sec. 301. Adoption of first concurrent resolution. 

See. 302. Matters to be included in joint statement of managers; reports by 
committees. 

Sec. 303. First concurrent resolution on the budget must be adopted before legis- 
lation providing new budget authority, new spending authority, or 
changes in revenues or public debt limit is considered. 

Sec. 304. Permissible revisions of concurrent resolutions on the budget. 

Sec. oOo. Provisions relating to the consideration of concurrent resolutions on 
the budget. 

Sec. 300. Legislation dealing with congressional budget must be handled by 
l>u(lget committees. 

Sec. 30 1. House committee action on all appropriation bills to be completed 
before first appropriation bill is reported. 



29 



§1 BUDGET AND IMPOUNDMENT CONTROL ACT 

Sec. 308. Reports, summaries, and projections of congressional budget actions. 

Sec. 309. Completion of action on bills providing new budget authority and cer- 
tain new spending authority. 

Sec. 310. Second required concurrent resolution and reconciliation process. 

Sec. 311. New budget authority, new spending authority, and revenue legislation 
must be within appropriate levels. 

TITLE IV— ADDITIONAL PROVISIONS TO IMPROVE FISCAL 
PROCEDURES 

Sec. 401. Bills providing new spending authority. 

Sec. 402. Reporting of authorizing legislation. 

Sec. 403. Analyses by Congressional Budget Oflace. 

Sec. 404. Jurisdiction of Appropriations Committees. 

TITLE V— CHANGE OF FISCAL YEAR 

Sec. 501. Fiscal year to begin October 1. 

Sec. 502. Transition to new fiscal year. 

Sec. 503. Accounting procedures. 

Sec. 504. Conversion of authorizations of appropriations. 

Sec. 505. Repeals. 

Sec. 506. Technical amendment. 

TITLE VI— AMENDMENTS TO BUDGET AND ACCOUNTING ACT, 1921 

Sec. 601. Matters to be included in President's budget. 
Sec. 602. Midyear review. 
Sec. 603. Five-year budget projections. 

Sec. 604. Allowances for supplemental budget authority and uncontrollable out- 
lays. 
Sec. 605. Budget data based on continuation of existing level of services. 
Sec. 606. Study of off-budget agencies. 
Sec. 607. Year-ahead requests for authorization of new budget authority. 

TITLE VII— PROGRAM REVIEW AND EVALUATION 

Sec. 701. Review and evaluation by standing committee. 

Sec. 702. Review and evaluation by the Comptroller General. 

Sec. 703. Continuing study of additional budget reform proposals. 

TITLE VIII— FISCAL AND BUDGETARY INFORMATION AND CONTROLS 

Sec. 801. Amendment to Legislative Reorganization Act of 1970. 
Sec. 802. Changes in functional categories. 

TITLE IX— MISCELLANEOUS PROVISIONS; EFFECTIVE DATES 

Sec. 901. Amendments to rules of the House. 

Sec. 902. Conforming amendments to standing rules of the Senate. 

Sec. 903. Amendments to Legislative Reorganization Act of 1946. 

Sec. 904. Exercise of rulemaking powers. 

Sec. 905. Effective dates. 

Sec. 906. Application of congressional budget process to fiscal year 1976. 

TITLE X— IMPOUNDMENT CONTROL 

Pabt A — General Pbovisions 
Sec. 1001. Disclaimer. 

Sec. 1002. Amendment to Antideflciency Act. 
Sec. 1003. Repeal of existing impoundment reporting provision. 



50 



BUDGET AND IMPOUNDMENT CONTROL ACT §3 

Part B — Congressional Consideration of Proposed Rescissions, 
Reservations, and Deferrals of Budget Authority 

Sec. 1011. Definitions. 

Sec. 1012. Rescission of budget authority. 

Sec. 1013. Disapproval of proposed deferrals of budget authority. 

Sec. 1014. Transmission of messages ; publication. 

Sec. 1015. Reports of Comptroller General. 

Sec. 1016. Suits by Comptroller General. 

Sec. 1017. Procedure in House and Senate. 

DECLARATION OF PURPOSES 

Sec. 2. The Congress declares that it is essential — 

(1) to assure effective congressional control over the budgetary 
process ; 

(2) to provide for the congressional determination each year 
of the appropriate level of Federal revenues and expenditures; 

(3) to provide a system of impoundment control ; 

(4) to establish national budget priorities; and 

(5) to provide for the furnishing of information by the execu- 
tive branch in a manner that will assist the Congress in dis- 
charging its duties. 

DEFINITIONS 

Sec. 3.^ — In General. — For purposes of this Act — 

(1) The terms "budget outlays" and "outlays" mean, vrith 
respect to any fiscal year, expenditures and net lending of funds 
under budget authority during such year. 

(2) The term "budget authority" means authority provided by 
law to enter into obligations which will result in immediate or 
future outlays involving Government funds, except that such term 
does not include authority to insure or guarantee the repayment 
of indebtedness incurred by another person or government. 

(3) The term "tax expenditures" means those revenue losses 
attributable to provisions of the Federal tax laws which allow a 
special exclusion, exemption, or deduction from gross income or 
which provide a special credit, a preferential rate of tax, or a 
deferral of tax liability ; and the term "tax expenditures budget" 
means an enumeration of such tax expenditures. 

(4) The term "concurrent resolution on the budget" means — 

(A) a concurrent resolution setting forth the congressional 
budget for the United States Government for a fiscal year as 
provided in section 301 ; 

(B) a concurrent resolution reaffirming or revising the con- 
gressional budget for the United States Government for a 
fiscal year as provided in section 310 ; and 

(C) any other concurrent resolution revising the congres- 
sional budget for the United States Government for a fiscal 
year as described in section 304. 

(5) The term "appropriation Act" means an Act referred to in 
section 105 of title 1, United States Code. 



on TSt/^^LS^^'^i ^^o ^t ^^^i\ Amendment, Public Law 05-110. approved September 
tlon "rhV" section 3. by striking subsection designation "(a)" and deleting subsec 



31 



§101 BUDGET AND IMTOUNDMENT CONTROL ACT 

TITLE I— ESTABLISHMENT OF HOUSE AND SENATE 
BUDGET COMMITTEES 

BUDGET COMMITTEE OF THE HOUSE OF REPRESENTATIVES 

Sec. 101. (a) Clause 1 of Eule X of the Rules of the House of 
Representatives is amended by redesignating paragraphs (e) through 
(u) as paragraphs (f) through (v), respectively, and by inserting 
after paragraph (d) the following new paragraph: 

"(e) Committee on the Budget, to consist of twenty-three Members 
as follows : 

"(1) five Members who are members of the Committee on 
Appropriations ; 

"(2) five Members who are members of the Committee on Ways 
and Means ; 

"(3) eleven Members who are members of other standing 
committees ; 

"(4) one Member from the leadership of the majority party; 
and 

"(5) one ]\Iember from the leadership of the minority party. 
No Member shall serve as a member of the Committee on the Budget 
during more than two Congresses in any period of five successive 
Congresses beginning after 1974 (disregarding for this purpose any 
service performed as a member of such committee for less than a full 
session in any Congress). All selections of Members to serve on the 
committee shall be made without regard to seniority." 

(b) Rule X of the Rules of the House of Representatives is amended 
by adding at the end thereof the following new clause : 

"6. For carrying out the purposes set forth in clause 5 of Rule XI, 
the Committee on the Budget or any subcommittee thereof is author- 
ized to sit and act at such times and places within the United States, 
whether the House is in session, has recessed, or has adjourned, to hold 
such hearings, to require the attendance of such witnesses and the pro- 
duction of such books or papers or documents or vouchers by subpena 
or otherwise, and to take such testimony and records, as it deems nec- 
essary. Subpenas may be issued over the signature of the chairman of 
the committee or of any member of the committee designated by him ; 
and may be served by any person designated by such chairman or 
member. The chairman of the committee, or any member thereof, may 
administer oaths to witnesses." 

(c) Rule XI of the Rules of the House of Representatives is 
amended by redesignating clauses 5 through 33 as clauses 6 through 34, 
respectively, and by inserting after clause 4 the following new clause : 

*'5. Committee on the Budget 

"(a) All concurrent resolutions on the budget (as defined in sec- 
tion 3(a)(4) of the Congressional Budget Act of 1974) and other 
matters required to be referred to the committee under titles III and 
IV of that Act. 

"(b) The committee shall have the duty — 

"(1) to report the matters requh-ed to be reported by it under 
titles III and IV of the Congressional Budget Act of 1974; 

"(2) to make continuing studies of the effect on budget outlays 
of relevant existing and proposed legislation and to report the 
results of such studies to the House on a recurring basis ; 



32 



BUDGET AND IMPOUNDMENT CONTROL ACT § 102 

''(3) to request and evaluate continuing studies of tax expendi- 
tures, to devise methods of coordinating tax expenditures, policies, 
and programs with direct budget outlays, and to report the results 
of such studies to the House on a recurring basis ; and 

"(4) to review, on a continuing basis, the conduct by the Con- 
rrressional Budget Office of its functions and duties." 

BUDGET COMMITTEE OF THE SENATE 

Sec. 102. (a) Paragraph 1 of rule XXV of the Standing Rules of 
the Senate is amended by adding at the end thereof the following new 
subparagraph : 

"(r)(l) Committee on the Budget, to which committee shall be 
referred all concurrent resolutions on the budget (as defined in section 
3(a) (4) of the Congressional Budget Act of 1974) and all other mat- 
ters required to be referred to that committee under titles III and IV 
of that Act, and messages, petitions, memorials, and other matters 
relating thereto. 

" (2) Such committee shall have the duty — 

"(A) to report the matters required to be reported by it under 
titles III and IV of the Congressional Budget Act of 1974 ; 

"(B) to make continuing studies of the effect on budget outlays 
of relevant existinor and proposed legislation and to report the 
results of such studies to the Senate on a recurring basis ; 

"(C) to request and evaluate continuing studies of tax expendi- 
tures, to devise methods of coordinating tax expenditures, policies, 
and programs wdth direct budget outlays, and to report the results 
of such studies to the Senate on a recurring basis ; and 

"(D) to review, on a continuing basis, the conduct by the Con- 
gressional Budget Office of its functions and duties." 

(b) The table contained in paragraph 2 of rule XXV of the Stand- 
ing Rules of the Senate is amended by inserting after — 

"Banking, Housing and Urban Affairs 15" 

The following : 

"Budget 15". 

(c) Paragraph 6 of rule XXV of the Standing Rules of the Senate 
is amended by adding at the end thereof the following new 
subparagraph : 

"(h) For purposes of the first sentence of subparagraph (a), mem- 
bership on the Committee on the Budget shall not be taken into 
account until that date occurring during the first session of the Ninety- 
fifth Congress, upon which the appointment of the majority and 
ininority party members of the standing committees of the Senate is 
initially completed." 

(d) Each meeting of the Committee on the Budget of the Senate, 
or any subcommittee thereof, including meetings to conduct hearings, 
shall be open to the public, except that a portion or portions of any 
such meeting may be closed to the public if the committee or subcom- 
mittee, as the case may be, determines by record vote of a majority of 
the members of the committee or subcommittee present that the matters 
to be discussed or the testimony to be taken at such portion or 
[portions — 



33 



§201 BUDGET AND IMPOUNDMENT CONTROL ACT 

(1) will disclose matters necessary to be kept secret in the inter- 
tists of national defense or the confidential conduct of the foreign 
relations of the United States ; 

(2) Avill relate solely to matters of committee staff personnel or 
internal staff management or procedure ; 

(3) will tend to charge an individual with crime or misconduct, 
to disgrace or injure the professional standing of an individual, 
or otherwise to expose an individual to public contempt or 
obloquy, or will represent a clearly unwarranted invasion of the 
privacy of an individual ; 

(4) will disclose the identity of any informer or law enforce- 
ment agent or will disclose any information relating to the investi- 
gation or prosecution of a criminal offense that is required to be 
kept secret in the interests of effective law enforcement; or 

(5) will disclose information relating to the trade secrets or 
financial or commercial information pertaining specifically to a 
given person if — 

(A) an Act of Congress requires the information to be kept 
confidential by Government officers and employees; or 

( B ) the information has been obtained by the Government 
on a confidential basis, other than through an application by 
such person for a specific Government financial or other bene- 
fit, and is required to be kept secret in order to prevent undue 
injury to the competitive position of such person. 

(e) Paragraph 7(b) of rule XXV of the Standing Rules of the 
Senate and section 133A(b) of the Legislative Reorganization Act of 
1946 shall not apply to the Committee on the Budget of the Senate, 

TITLE II— CONGRESSIONAL BUDGET OFFICE 

ESTABLISHMENT OF OFFICE 

Sec. 201. (a) In General. — 

( 1 ) There is established an office of the Congress to be known 
as the Congressional Budget Office (hereinafter in this title re- 
ferred to as the "Office") . The Office shall be headed by a Director ; 
and there shall be a Deputy Director who shall perform such 
duties as may be assigned to him by the Director and, during the 
absence or incapacity of the Director or during a vacancy in that 
office, shall act as Director. 

(2) The Director shall be appointed by the Speaker of the 
House of Representatives and the President pro tempore of the 
Senate after considering recommendations received from the 
Committees on the Budget of the House and the Senate, without 
regard to political affiliation and solely on the basis of his fitness 
to perform his duties. The Deputy Director shall be appointed by 
the Director. 

(3) The term of office of the Director first appointed shall 
expire at noon on January 3, 1979, and the terms of office of Direc- 
tors subsequently appointed shall expire at noon on January 3 of 
each fourth year thereafter. Any individual appointed as Direc- 
tor to fill a vacancy prior to the expiration of a term shall serve 



34 



BUDGET AND IMPOUNDMENT CONTROL ACT §201 

only for the unexpired portion of that term. An individual serv- 
ing as Director at the expiration of a term may continue to serve 
until his successor is appointed. Any Deputy Director shall serve 
until the expiration of the term of office of the Director who 
appointed him (and until his successor is appointed), unless 
sooner removed by the Director. 

(4) The Director may be removed by either House by 
resolution. 

(5) The Director shall receive compensation at a per annum 
gross rate equal to the rate of basic pay, as in effect from time to 
time, for level III of the Executive Schedule in section 5314 of 
title 5, United States Code. The Deputy Director shall receive 
compensation at a per annum gross rate equal to the rate of basic 
pay, as so in effect, for level IV of the Executive Schedule in 
section 5315 of such title. 

(b) Personnel. — The Director shall appoint and fix the compensa- 
tion of such personnel as may be necessary to carry out the duties and 
functions of the Office. All personnel of the Office shall be appointed 
without regard to political affiliation and solely on the basis of their 
fitness to perform their duties. The Director may prescribe the duties 
and responsibilities of the personnel of the Office, and delegate to them 
authority to perform any of the duties, powers, and functions imposed 
on the Office or on the Director. For purposes of pay (other than pay 
of the Director and Deputy Director) and employment benefits, rights, 
and privileges, all personnel of the Office shall be treated as if they 
were employees of the House of Kepresentatives. 

(c) Experts and Consultants. — In carrying out the duties and 
functions of the Office, the Director may procure the temporary (not 
to exceed one year) or intermittent services of experts or consultants 
or organizations thereof by contract as independent contractors, or, 
in the case of individual experts or consultants, by employment at rates 
of pay not in excess of the daily equivalent of the highest rate of basic 
pay payable under the General Schedule of section 5332 of title 5, 
United States Code. 

(d) Relationship to Executive Branch. — The Director is author- 
ized to secure information, data, estimates, and statistics directly from 
the various departments, agencies, and establishments of the executive 
branch of Government and the regulatory agencies and commissions 
of the Government. All such departments, agencies, establishments, 
and regulatory agencies and commissions shall furnish the Director 
any available material which he determines to be necessary in the 
performance of his duties and functions (other than material the 
disclosure of which would be a violation of law). The Director is 
also authorized, upon agreement with the head of any such depart- 
ment, agency, establishment, or regulatory agency or commission, to 
utilize its services, facilities, and personnel with or without reimburse- 
ment ; and the head of each such department, agency, establishment, 
or regulatory agency or commission is authorized to provide the Office 
such services, facilities, and personnel. 

(e) Relationship to Other Agencies of Congress. — In carrying 
out the duties and functions of the Office, and for the purpose of coor- 
dinating the operations of the Office with those of other congressional 



35 



§ 202 BUDGET AND IMPOUNDMENT CONTROL ACT 

agencies with a view to utilizing most effectively the information, 
services, and capabilities of all such agencies in carrying out the var- 
ious responsibilities assigned to each, the Director is authorized to 
obtain information, data, estimates, and statistics developed by the 
General Accounting Office, the Library of Congress, and the Office of 
Technology Assessment, and (upon agreement with them) to utilize 
their services, facilities, and personnel with or without reimburse- 
ment. The Comptroller General, the Librarian of Congress, and the 
Technology Assessment Board are authorized to provide the Office 
with the information, data, estimates, and statistics, and the services, 
facilities, and personnel, referred to in the preceeding sentence. 

(f ) Appropriations. — There are authorized to be appropriated to 
the Office for each fiscal year such sums as may be necessary to enable 
it to carry out its duties and functions. Until sums are first appropri- 
ated pursuant to the preceding sentence, but for a period not exceeding 
12 months following the effective date of this subsection, the expenses 
of the Office shall be paid from the contingent fund of the Senate, in 
accordance with the paragraph relating to the contingent fund of the 
Senate under the heading "UNDEE LEGISLATIVE" in the Act of 
October 1, 1888 (28 Stat. 546; 2 U.S.C. 68), and upon vouchers ap- 
proved by the Director. 

DUTIES AND FUNCTIONS 

Sec. 202. (a) Assistance to Budget Committees. — It shall be the 
duty and function of the Office to provide to the Committees on the 
Budget of both Houses information which will assist such committees 
in the discharge of all matters within their jurisdictions, including 
(1) information with respect to the budget, appropriation bills, and 
other bills authorizing or providing budget authority or tax expendi- 
tures, (2) information with respect to revenues, receipts, estimated 
future revenues and receipts, and changing revenue conditions, and 
(3) such related information as such Committees may request. 

(b) Assistance to Committees on Appropriations, Wats ant) 
Means, and Finance. — At the request of the Committee on Appropri- 
ations of either House, the Committee on Ways and Means of the 
House of Representatives, or the Committee on Finance of the Senate, 
the Office shall provide to such Committee any information which will 
assist it in the discharg'e of matters within its jurisdiction, including 
information described in clauses (1) and (2) of subsection (a) and 
such related information as the Committee may request. 

(c) Assistance to Other Committees and Members. — 

(1) At the request of any other committee of the House of Rep- 
resentatives or the Senate or any joint committee of the Congress, 
the Office shall provide to such committee or joint committee any 
information compiled in carrying out clauses (1) and (2) of sub- 
section (a), and, to the extent practicable, such additional infor- 
mation related to the foregoing as may be requested. 

(2) At the request of any Member of the House or Senate, the 
Office shall provide to such Member any information compiled in 
carrying out clauses (1) and (2) of subsection (a), and, to the 
extent available, such additional information related to the fore- 
going as may be requested. 



36 



BUDGET AND IMPOUNDMENT CONTROL ACT §203 

(d) Assignment of Office Personnel to Committees and Joint 
Committees. — At the request of the Committee on the Budget of either 
House, personnel of the Office shall be assigned, on a temporary basis, 
to assist such committee. At the request of any other committee of 
either House or any joint committee of the Congress, personnel of the 
Office may be assigned, on a temporary basis, to assist such committee 
or joint committee with respect to matters directly related to the 
applicable proA'isions of subsection (b) or (c). 

(e) Transfer of Functions of Joint Committee on Reduction of 
Fedeiuvl Expenditures. — 

( 1 ) The duties, functions, and personnel of the Joint Commit- 
tee on Reduction of Federal Expenditures are transferred to the 
Office, and the Joint Committee is abolished. 

(2) Section 601 of the Revenue Act of 1941 (55 Stat. 726) is 
repealed. 

(f) Reports to Budget Committees. — 

( 1 ) On or before April 1 of each year, the Director shall sub- 
mit to the Committees on the Budget of the House of Representa- 
tives and the Senate a report, for the fiscal year commencing on 
October 1 of that year, with respect to fiscal policy, including (A) 
alternative levels of total revenues, total new budget authority, 
and total outlays (including related surpluses and deficits), and 
(B) the levels of tax expenditures under existing law, taking into 
account projected economic factors and any changes in such levels 
based on proposals in the budget submitted by the President for 
such fiscal year. Such report shall also include a discussion of 
national budget priorities, including alternative ways of allocating 
budget authority and budget outlays for such fiscal year among 
major programs or functional categories, taking into account 
how such alternative allocations will meet major national needs 
and all'ect balanced growth and development of the United States. 

(2) The Director shall from time to time submit to the Com- 
mittees on the Budget of the House of Representatives and the 
Senate such further reports (including reports revising the re- 
port required by paragraph (1)) as may be necessary or appro- 
priate to provide such Committees with information, data, and 
analyses for the performance of their duties and functions. 

(g) Use of Computers and Other Techniques. — The Director may 
equip the Office with up-to-date computer capability (upon approval 
of the Committee on House Administration of the House of Repre- 
sentatives and the Committee on Rules and Administration of the 
Senate), obtain the services of experts and consultants in computer 
technology, and develop techniques for the evaluation of budgetary 
requirements. 

public access to budget data 

Sec. 20o. (a) Right To Copt. — Except as provided in subsections 
(c) and (d). the Director shall make all information, data, estimates, 
and statistics obtained under sections 201(d) and 201(e) available for 
public copying during normal business hours, subject to reasonable 
rules and regulations, and shall to the extent practicable, at the request 
of any pei-son, furnish a copy of any such information, data, estimates, 
or statistics upon payment by such person of the cost of making and 
furnishing such cbpy. 



37 



§300 BUDGET AND IMPOUNDMENT CONTROL ACT 

(b) Index. — The Director shall develop and maintain filing, coding, 
and indexing systems that identify the information, data, estimates, 
and statistics to which subsection (a) applies and shall make such sys- 
tems available for public use during normal business hours. 

(c) Exceptions. — Subsection (a) shall not apply to information, 
data, estimates, and statistics — 

(1) which are specifically exempted from disclosure by law; or 

(2) which the Director determines will disclose — 

(A) matters necessary to be kept secret in the interests of 
national defense or the confidential conduct of the foreign re- 
lations of the United States ; 

(B) information relating to trade secrets or financial or 
commercial information pertaining specifically to a given 
person if the information has been obtained by the Govern- 
ment on a confidential basis, other than through an applica- 
tion by such person for a specific financial or other benefit, 
and is required to be kept secret in order to prevent undue 
injury to the competitive position of such person; or 

(C) personnel or medical data or similar data the disclo- 
sure of which would constitute a clearly unwarranted inva- 
sion of personal privacy ; 

unless the portions containing such matters, information, or data 
have been excised. 

(d) Information Obtained for Committees and Members. — Sub- 
section (a) shall apply to any information, data, estimates, and sta- 
tistics obtained at the request of any committee, joint committee, or 
Member unless such committee, joint committee, or Member has in- 
structed the Director not to make such information, data, estimates, 
or statistics available for public copying. 

TITLE III— CONGKESSIONAL BUDGET PROCESS 

timetable 

Sec. 300. The timetable with respect to the congressional budget 
process for any fiscal year is as follows : 

On or before : Action to be completed : 

November 10 President submits current services budget. 

15th day after Congress meets- President submits his budget. 

March 15 Committees and joint committees submit reports 

to Budget Committees. 

April 1 Congressional Budget Office submits report to 

Budget Committees. 

April 15 Budget Committees report first concurrent res- 
olution on the budget to their Houses. 

May 15 Committees report bills and resolutions author- 
izing new budget authority. 

May 15 Congress completes action on first concurrent 

resolution on the budget. 

7th day after Labor Day Congress completes action on bills and resolu- 
tions providing new budget authority and new 
spending authority. 

September 15 Congress completes action on second required 

concurrent resolution on the budget. 

September 25 Congress completes action on reconciliation bill 

or resolution, or both, implementing second 
required concurrent resolution. 

October 1 Fiscal year begins. 

38 



BUDGET AND IMPOUNDMENT CONTROL ACT §301 

ADOPTION OF THE FIRST CONCURRENT RESOLUTION 

Sec. 301. (a) Action To Be Completed by ^May 15. — On or before 
May 15 of each year, the Congress shall complete action on the first 
concurrent resolution on the budget for the fiscal year beginning on 
October 1 of such year. The concurrent resolution shall set forth — 

(1) the appropriate level of total budget outlays and of total 
new budget authority ; 

(2) an estimate of budget outlays and an appropriate level of 
new budget authority for each major functional category, for 
contingencies, and for undistributed intragovernmental transac- 
tions based on allocations of the appropriate level of total budget 
outlays and of total new budget authority ; 

(3) the amount, if any, of the surplus or the deficit in the budget 
which is appropriate in light of economic conditions and all other 
relevant factors ; 

(4) the recommended level of Federal revenues and the amount, 
if any, by which the aggregate level of Federal revenues should 
be increased or decreased by bills and resolutions to be reported 
by the appropriate committees ; 

(5) the appropriate level of the public debt, and the amount, if 
any, by which the statutory limit on the public debt should be 
increased or decreased by bills and resolutions to be reported by 
the appropriate committees ; and 

(6) such other matters relating to the budget as may be appro- 
priate to carry out the purposes of this Act. 

(b) x^DDiTioxAL Matters ix Coxcurrext Resolutiox. — The first 
concurrent resolution on the budget may also require — 

(1) a procedure under which all or certain bills and resolutions 
providing new budget authority or providing new spending 
authority described in section 401(c) (2) (C) for such fiscal year 
shall not be enrolled until the concurrent resolution required to be 
reported under section 310(a) has been agreed to, and, if a recon- 
ciliation bill or reconciliation resolution, or both, are required to 
be reported under section 310(c), until Congress has completed 
action on that bill or resolution, or both ; and 

(2) any other procedure which is considered appropriate to 
carry out the purposes of this Act. 

Not later than the close of the Xinety-fifth Congress, the Committee 
on the Budget of each House shall report to its Plouse on the imple- 
mentation of procedures described in this subsection. 

(c) Views axd Estimates of Other Committees. — On or before 
March 15 of each year, each standing committee of the House of 
Representatives shall submit to the Committee on the Budget of the 
House, each standing committee of the Senate shall submit to the 
Committee on the Budget of the Senate, and the Joint Economic Com- 
mittee and Joint Committee on Internal Revenue Taxation shall sub- 
mit to the Committees on the Budget of both Houses — 

(1) its views and estimates with respect to all matters set forth 
in subsection (a) which relate to matters within the respective 
jurisdiction or functions of such committee or joint committee; 
and 

(2) except in the case of such joint committees, the estimate 
of the total amounts of new budget authority, and budget outlays 



39 



§301 BUDGET AND IMPOUNDMENT CONTROL ACT 

resulting therefrom, to be provided or authorized in all bills and 
resolutions within the jurisdiction of such committee which such 
committee intends to be effective during the fiscal year beginning 
on October 1 of such year. 
The Joint Economic Committee shall also submit to the Committees 
on the Budget of both Houses, its recommendations as to the fiscal 
policy appropriate to the goals of the Employment Act of 1946. Any 
other committee of the House or Senate may submit to the Committee 
on the Budget of its House, and any other joint committee of the 
Congress may submit to the Committees on the Budget of both Houses 
its views and estimates with respect to all matters set forth in sub- 
section ia) which relate to matters within its jurisdiction or functions, 
(d) Hearings and Report. — In developing the first concurrent reso- 
lution on the budget referred to in subsection (a) for each fiscal year, 
the Committee on the Budget of each House shall hold hearings and 
shall receive testimony from Members of Congress and such appro- 
priate representatives of Federal departments and agencies, the gen- 
eral public, and national organizations as the committee deems 
desirable. On or before April 15 of each year, the Committee on the 
Budget of each House shall report to its House the first concurrent 
resolution on the budget referred to in subsection (a) for the fiscal 
year beginning on October 1 of such year. The report accompanying 
such concurrent resolution shall include, but not be limited to — 

(1) a comparison of revenues estimated by the committee with 
those estimated in the budget submitted by the President ; 

(2) a comparison of the appropriate levels of total budget out- 
lays and total new budget authority, as set forth in such 
concurrent resolution, with total budget outlays estimated and 
total new budget authority requested in the budget submitted by 
the President ; 

(3) with respect to each major functional category, an estimate 
of budget outlays and an appropriate level of new budget author- 
ity for all proposed programs and for all existing programs 
(including renewals thereof), with the estimate and level for 
existing programs being divided between permanent authority 
and funds provided in appropriation Acts, and each such division 
being subdivided between controllable amounts and all other 
amounts ; 

(4) an allocation of the level of Federal revenues recommended 
in the concurrent resolution among the major sources of such 
revenues ; 

(5) the economic assumptions and objectives which underlie 
each of the matters set forth in such concurrent resolution and 
alternative economic assumptions and objectives which the com- 
mittee considered ; 

(6) projections, not limited to the following, for the period of 
five fiscal years beginning with such fiscal year of the estimated 
levels of total budget outlays, total new budget outl^-ys, total new 
budget authority, the estimated revenues to be received, and the 
estimated surplus or deficit, if any, for each fiscal year in sucli 
period, and the estimated levels of tax expenditures (the tax 
expenditures budget) by major functional categories; 



40 



BUDGET AND IMPOUNDMENT CONTROL ACT § 302 

(7) a statement of any significant changes in the proposed 
levels of Federal assistance to State and local governments ; and 

(8) information, data, and comparisons indicating the manner 
in which, and the basis on which, the committee determined each 
of the matters set forth in the concurrent resolution, and the rela- 
tionship of such matters to other budget categories. 

MATTERS TO BE INCLUDED IN JOINT STATEMENT OF MANAGERS; ,. 
REPORTS BY COMMITTEES 

Sec. 302. (a) Allocation or Totals.— The joint explanatory state- 
ment accompanying a conference report on a concurrent resolution on 
the budget shall include an estimated allocation, based upon such con- 
current resolution as recommended in such conference report, of the 
appropriate levels of total budget outlays and total new budget au- 
thority among each committee of the House of Representatives and the 
Senate which has jurisdiction over bills and resolutions providing such 
new budget authority. 

(b) Reports by Committees. — As soon as practicable after a con- 
current resolution on the budget is agreed to — 

(1 ) the Committee on Appropriations of each House shall, after 
consulting with the Committee on Appropriations of the other 
House, (A) subdivide among its subcommittees the allocation of 
budget outlays and new budget authority allocated to it in the 
joint explanatory statement accompanying the conference report 
on such concurrent resolution, and (B) further subdivide the 
amount with respect to each such subcommittee between con- 
trollable amounts and all other amounts ; and 

(2) every other committee of tlie House and Senate to which 
an allocation was made in such joint explanatory statement shall, 
after consulting with the committee or committees of the other 
House to which all or part of its allocation was made, (A) sub- 
divide such allocation among its subcommittees or among pro- 
grams over which it has jurisdiction, and (B) further subdivide 
the amount with respect to each subcommittee or program between 
controllable amounts and all other amounts. 

Each such committee shall promptly report to its House the subdivi- 
sions made by it pursuant to this subsection. 

(c) Subsequent Concurrent Resolutions. — In the case of a con- 
current resolution on the budget referred to in section 304 or 310, the 
allocation under subsection (a) and the subdivisions under subsection 
(b) shall be required only to the extent necessary to take into account 
revisions made in the most recently agreed to concurrent resolution 
on the budget. 

FIRST concurrent RESOLUTION ON THE BUDGET MUST BE ADOPTED BEFORE 
LEGISLATION PROVIDING NEW BUDGET AUTHORITY, NEW SPENDING 
AUTHORITY, OR CHANGES IN REVENUES OR PUBLIC DEBT LIMIT IS CON- 
SIDERED 

Sec. 303. (a) In General.— It shall not be in order in either the 
House of Representatives or the Senate to consider any bill or resolu- 
tion (or amendment thereto) which provides — 



41 



§303 BUDGET AND IMPOUNDMENT CONTROL ACT 

(1) new budget authority for a fiscal year; 

(2) an increase or decrease in revenues to become effective 
during a fiscal year ; 

(3) an increase or decrease in the public debt limit to become 
effective during a fiscal year ; or 

(4) new spending authority described in section 401(c) (2) (C) 
to become efltective during a fiscal year ; 

until the first concurrent resolution on the budget for such year has 
been agreed to pursuant to section 301. 

(b) Exceptions. — Subsection (a) does not apply to any bill or 
resolution — 

(1) providing new budget authority which first becomes avail- 
able in a fiscal year following the fiscal year to which the con- 
current resolution applies ; or 

(2) increasing or decreasing revenues which first become effec- 
tive in a fiscal year following the fiscal year to which the con- 
current resolution applies. 

'(c) Waiver in the Senate. — 

( 1 ) The committee of the Senate which reports any bill or res- 
olution to which subsection (a) applies may at or after the time it 
reports such bill or resolution, report a resolution to the Senate 
(A) providing for the waiver of subsection (a) with respect to 
such bill or resolution, and (B) stating the reasons why the 
waiver is necessary. The resolution shall then be referred to the 
Committee on the Budget of the Senate. That committee shall 
report the resolution to the Senate within 10 days after the res- 
olution is referred to it (not counting any day on which the 
Senate is not in session) beginning with the day following the day 
on which it is so referred, accompanied by that committee's rec- 
ommendations and reasons for such recommendations with respect 
to the resolution. If the committee does not report the resolution 
within such 10-day period, it shall automatically be discharged 
from further consideration of the resolution and the resolution 
shall be placed on the calendar. 

(2) During the consideration of any such resolution, debate 
shall be limited to one hour, to be equally divided between, and 
controlled by, the majority leader and minority leader or their 
designees, and the time on any debatable motion or appeal shall 
be limited to twenty minutes, to be equally divided between, and 
controlled by the mover and the manager of the resolution. In the 
event the manager of the resolution is m favor of any such motion 
or appeal, the time in opposition thereto shall be controlled by the 
minority leader or his designee. Such leaders, or either of them, 
may, from the time under their control on the passage of such 
resolution, allot additional time to any Senator during the con- 
sideration of any debatable motion or appeal. No amendment to 
the resolution is in order. 

(B) If, after the Committee on the Budget has reported (or 
been discharged from further consideration of) the resolution, 
the Senate agrees to the resolution, then subection (a) of this 
section shall not apply with respect to the bill or resolution to 
which the resolution so agreed to applies. 



42 



BUDGET AND IMPOUNDMENT CONTROL ACT §305 

PERMISSIBLE REVISIONS OF CONCURRENT RESOLUTIONS OF THE BUDGET 

Sec. 304. At any time after the first concurrent resolution on the 
budget for a liscal year has been a<rroed to pursuant to section 301, and 
before the end of such fiscal year, tlie two Houses may adopt a con- 
current resolution on the budget which revises the concurrent resolu- 
tion on the budget for such fiscal year most recently agreed to. 

PR0\T:SI0NS reflating to the consideration of CONCURRENT 
RESOLUTIONS ON THE BUDGET 

Sec. 305. (a) Procedure in House of Representati\t:s After Re- 
port OF Committee ; Debate. — 

(1) When the Committee on the Budget of the House has 
reported any concurrent resolution on the budget, it is in order 
at any time after the tenth day (excluding Saturdays, Sundays, 
and legal holidays) following the day on which the report upon 
such resolution has been available to Members of the House (even 
though a previous motion to the same effect has been disagreed 
to) to move to proceed to the consideration of the concurrent reso- 
lution. The motion is highly privileged and is not debatable. An 
amendment to the motion is not in order, and it is not in order to 
move to reconsider the vote by which the motion is agreed to or 
disagreed to. 

(2) General debate on any concurrent resolution on the budget 
in the House of Representatives shall be limited to not more than 
10 hours, which shall be divided equally between the majority and 
minority parties. A motion further to limit debate is not debat- 
able. A motion to recommit the concurrent resolution is not in 
order, and it is not in order to move to reconsider the vote by 
which the concurrent resolution is agreed to or disagreed to. 

(3) Consideration of any concurrent resolution on the budget 
by the House of Representatives shall be in the Committee of the 
'\yhole, and the resolution shall be read for amendment under the 
five-minute rule in accordance with the applicable provisions of 
rule XXIII of the Rules of the House of Representatives. After 
the Committee rises and reports the resolution back to the House, 
the previous question shall be considered as ordered on the reso- 
lution and any amendments thereto to final passage without inter- 
vening motion ; except that it sliall be in order at any time prior 
to final passage (notwithstanding any other rule or provision of 
law) to adopt an amendment (or a series of amendments) chang- 
ing any figure or figures in the resolution as so reported to the 
extent necessary to achieve mathematical consistency. 

(4) Debate in the House of Representatives on the conference 
report or any concurrent resolution on the budget shall be limited 
to not more than 5 hours, which shall be divided equally between 
the majority and minority parties. A motion further to limit 
debate is not debatable^. A motion to recommit the conference 
report is not in order, and it is not in order to move to reconsider 
the vote by which the conference report is agreed to or dis- 
agreed to. 



43 



§305 BUDGET AND IMPOUNDMENT CONTROL ACT 

(5) Motions to postpone, made with respect to the consideration 
of any concurrent resolution on the budget, and motions to pro- 
ceed to the consideration of other business, shall be decided with- 
out debate. 

(6) Appeals from the decisions of the Chair relating to the 
application of the Eules of the House of Eepresentatives to the 
procedure relating to any concurrent resolution on the budget 
shall be decided without debate. 

(b) Procedure ix Senate After Report op Committee; Debate; 
Amendments. — 

(1) Debate in the Senate on any concurrent resolution on the 
budget, and all amendments thereto and debatable motions and 
appeals in connection therewith, shall be limited to not more 
than 50 hours, except that, with respect to the second required 
concurrent resolution referred to in section 310(a), all such debate 
shall be limited to not more than 15 hours. The time shall be 
equally divided between, and controlled by, the majority leader 
and the minority leader or their designees. 

(2) Debate in the Senate on any amendment to a concurrent 
resolution on the budget shall be limited to 2 hours, to be equally 
divided between, and controlled by, the mover and the manager 
of the concurrent resolution, and debate on any amendment to an 
amendment, debatable motion, or appeal shall be limited to 1 hour, 
to be equally divided between, and controlled by, the mover and 
the manager of the concurrent resolution, except that in the event 
the manager of the concurrent resolution is in favor of any such 
amendment, motion, or appeal, the time in opposition thereto 
shall be controlled by the minority leader or his designee. No 
amendment that is not germane to the provisions of such con- 
current resolution shall be received. Such leaders, or either of 
them, may, from the time under their control on the passage of 
the concurrent resolution, allot additional time to any Senator 
during the consideration of any amendment, debatable motion, 
or appeal. 

(3) A motion to further limit debate is not debatable. A 
motion to recommit (except a motion to recommit with instruc- 
tions to report back within a specified number of days, not to 
exceed 3, not counting any day on which the Senate is not in 
session) is not in order. Debate on any such motion to recommit 
shall be limited to 1 hour, to be equally divided between, and 
controlled by, the mover and the manager of the concurrent 
resolution. 

(4) Notwithstanding any other rule, an amendment, or series 
of amedments, to a concurrent resolution on the budget proposed 
in the Senate shall always be in order if such amendment or series 
of amendments proposes to change any figure or figures then con- 
tained in such concurrent resolution so as to make such concurrent 
resolution mathematically consistent or so as to maintain such 
consistency. 

(c) Action on Conference Reports in the Senate. — 

(1) The conference report on any concurrent resolution on the 
budget shall be in order m the Senate at any time after the third 



44 



BUDGET AND IMPOUNDMENT CONTROL ACT §305 

day (excluding Saturdays, Sundays, and legal holidays) follow- 
ing the day on which such a conference report is reported and is 
available to Members of the Senate. A motion to proceed to the 
consideration of the conference report may be made even though a 
previous motion to the same effect has been disagreed to. 

(2) During the consideration in the Senate of the conference 
report on any concurrent resolution on the budget, debate shall be 
limited to 10 hours, to be equally divided between, and controlled 
by, the majority leader and minority leader or their designees. 
Debate on any debatable motion or appeal related to the confer- 
ence report shall be limited to 1 hour, to be equally divided 
between, and controlled by, the mover and the manager of the 
conference report. 

(3) Should the conference report be defeated, debate on any 
request for a new conference and the appointment of conferees 
shall be limited to 1 hour, to be equally divided between, and 
controlled by, the manager of the conference report and the 
minority leader or his designee, and should any motion be made 
to instruct the conferees before the conferees are named, debate 
on such motion shall be limited to one-half hour, to be equally 
divided betAveen, and controlled by, the mover and the manager 
of the conference report. Debate on any amendment to any such 
instructions shall be limited to 20 minutes, to be equally divided 
between and controlled by the mover and the manager oJ the con- 
ference report. In all cases when the manager of the conference 
report is in favor of any motion, appeal, or amendment, the time 
in opposition shall be under the control of the minority leader or 
his designee. 

(4) In any case in which there are amendments in disagree- 
ment, time on each amendment shall be limited to 30 minutes, to 
be equally divided between, and controlled by. the manager of the 
conference report and the minority leader* or his designee. Xo 
amendment that is not germane to the provisions of such amend- 
ments shall be received. 

(d) Required Acnox by Coxferexce Committee.— If, at the end of 
7 days (excluding Saturdays, Sundays, and legal holidays) after the 
conferees of both Houses have been appointed to a comrnittee of con- 
ference on a concurrent resolution on the budget, the conferees are 
unable to reach agreement with respect to all matters in disagreement 
between the two Houses, then the conferees shall submit to their 
respective Houses, on the first day thereafter on which their House 
is m session — 

(1) a conference report recommending those matters on which 
they have agreed and reporting in disagreement those matters on 
which they have not agreed ; or 

(2) a conference report in disagreement, if the matter in dis- 
agreement is an amendment which strikes out the entire text of 
the concurrent resolution and inserts a substitute text. 

(e) Coxcurrext Resolutiox Must Be Coxsistext ix the Sex- 
ate.— It shall not be in order in the Senate to vote on the question of 
agreeing to — ^ 



45 



§306 BUDGET AND IMPOUNDMENT CONTROL ACT 

( 1 ) a concurrent resolution on the budget unless the figures then 
contained in such resolution are mathematically consistent; or 

( 2 ) a conference report on a concurrent resolution on the budget 
unless the figures contained in such resolution, as recommended 
in such conference report, are mathematically consistent. 

LEGISLATION DEALING WITH CONGRESSIONAL BUDGET MUST BE HANDLED 
BT BUDGET COMMITTEES 

Sec. 306. No bill or resolution, and no amendment to any bill or 
resolution, dealing with any matter which is within the jurisdiction 
of the Committee on the Budget of either House shall be considered 
in that House unless it is a bill or resolution which has been reported 
by the Committee on the Budget of that House (or from the considera- 
tion of which such committee has been discharged) or unless it is an 
amendment to such a bill or resolution. 

HOUSE COMMITTEE ACTION ON ALL APPROPRIATION BILLS TO BE COMPLETED 
BEFORE FIRST APPROPRIATION BILL IS REPORTED 

Sec. 307. Prior to reporting the first regular appropriation bill for 
each fiscal year, the Committee on Appropriations of the House of 
Representatives shall, to the extent practicable, complete subcommittee 
markup and full committee action on all regular appropriation bills 
for that year and submit to the House a summary report comparing 
the committee's recommendations with the appropriate levels of budget 
outlays and new budget authority as set forth in the most recently 
agreed to concurrent resolution on the budget for that year. 

REPORTS, SUMMARIES, AND PROJECTIONS OF CONGRESSIONAL BUDGET 

ACTIONS 

Sec. 308. (a) Reports on Legislation Providing New Budget 
Authority or Tax Expenditures. — Whenever a committee of either 
House reports a bill or resolution to its House providing new budget 
authority (other than continuing appropriations) or new or increased 
tax expenditures for a fiscal year, the report accompanying that bill 
or resolution shall contain a statement, prepared after consultation 
with the Director of the Congressional Budget Office, detailing — 

(1) in the case of a bill or resolution providing new budget 
authority — 

(A) how the new budget authority provided in that bill 
or resolution compares with the new budget authority set 
forth in the most recently agreed to concurrent resolution 
on the budget for such fiscal year and the reports submitted 
under section 302 ; 

(B) a projection for the period of 5 fiscal years beginning 
with such fiscal year of budget outlays, associated with the 
budget authority provided in that bill or resolution, in each 
fiscal year in such period ; and 

(C) the new budget authority, and budget outlays result- 
ing therefrom, provided by that bill or resolution for finan- 
cial assistance to State and local governments ; and 



46 



BUDGET AND IMPOUNDMENT CONTROL ACT §308 

(2) in the case of a bill or resolution providing new or increased 
tax expenditures — 

(A) how the new or increased tax expenditures provided in 
that bill or resolution will affect the levels of tax expenditures 
under existing law as set forth in the report accompanying 
the first concurrent resolution on the budget for such fiscal 
year, or, if a report accompanying a subsequently agreed to 
concurrent resolution for such year sets forth such levels, 
then as set forth in that report ; and 

(B) a projection for the period of 5 fiscal years beginning 
with such fiscal ^-ear of the tax expenditures which will result 
from that bill or resolution in each fiscal year in such period. 

No projection shall be required for a fiscal year under paragraph (1) 
(B) or (2) (B) if the committee determines that a projection for that 
fiscal year is impracticable and states in its report the reason for such 
impracticability. 

(b) Up-to-Date Tabui^\tiox of Coxgressioxal Budget Actioxs. — 
The Director of the Congressional Budget Office shall issue periodic 
reports detailing and tabulating the progress of congressional action 
on bills and resolutions providing new budget authority and changing 
revenues and the public debt limit for a fiscal year. Such reports shall 
include, but are not limited to — 

(1) an up-to-date tabulation comparing the new budget author- 
ity for such fiscal year in bills and resolutions on which Congress 
has completed action and estimated outlays, associated with such 
new budget authority, during such fiscal year to the new budget 
authority and estimated outlays set forth in the most recently 
agreed to concurrent resolution on the budget for such fiscal year 
and the reports submitted under section 302 ; 

(2) an up-to-date status report on all bills and resolutions pro- 
viding new budget authorit}^ and changing revenues and the pub- 
lic debt limit for such fiscal year in both Houses; 

(3) an up-to-date comparison of the appropriate level of reve- 
nues contained in the most recenth^ agreed to concurrent resolu- 
tion on the budget for such fiscal year with the latest estimate of 
revenues for such year (including new revenues anticipated dur- 
ing such year under bills and resolutions on which the Congress 
has completed action) ; and 

(4) an up-to-date comparison of the appropriate level of the 
public debt contained in the most recently agreed to concurrent 
resolution on the budget for such fiscal 3^ear with the latest esti- 
mate of the public debt during such fiscal year. 

(c) Fr-e-Year Projectiox of Coxgressioxal Budget Actiox. — As 
soon as practicable after the beginning of each fiscal year, the Director 
of the Congressional Budget Office shall issue a report projecting for 
the period of 5 fiscal years beginning with such fiscal year — 

(1) total new budget authority and total budget outlays for 
each fiscal year in such period ; 

(2) revenues to be received and the major sources thereof, and 
the surplus or deficit, if any, for each fiscal year in such period ; 
and 

(3) tax expenditures for each fiscal year in such period. 



47 



§309 BUDGET AND IMPOUNDMENT CONTROL ACT 

COMPLETION OP ACTION ON BIIXS PROVIDING NEW BUDGET AUTHORITY AND 
CERTAIN NEW SPENDING AUTHORITY 

Sec 309. Except as otherwise provided pursuant to this title, not 
later than the seventh day after Labor Day of each year, the Congress 
shall complete action on all bills and resolutions — 

(1) providing new budget authority for the fiscal year begin- 
ning on October 1 of such year, other than supplemental, defi- 
ciency, and continuing appropriation bills and resolutions, and 
other than the reconciliation bill for such year, if required to be re- 
ported under section 310 (c) ; and 

(2) providing new spending authority described in section 401 
(c) (2) (C) which is to become effective during such fiscal year. 

Paragraph (1) shall not apply to any bill or resolution if legislation 
authorizing the enactment of new budget authority to be provided in 
such bill or resolution has not been timely enacted. 

SECOND REQUIRED CONCURRENT RESOLUTION AND RECONCILIATION 

PROCESS 

Sec. 310. (a) Reporting of Concurrent Resolution. — The Com- 
mittee on the Budget of each House shall report to its House a con- 
current resolution on the budget which reaffirms or revises the con- 
current resolution on the budget most recently agreed to with respect 
to the fiscal year beginning on October 1 of such year. Any such con- 
current resolution on the budget shall also, to the extent necessary — 

( 1 ) specify the total amount by which — 

(A) new budget authority for such fiscal year; 

(B) budget authority initially provided for prior fiscal 
years; and 

(C) new spending authority described in section 401 (c) (2) 
(C) which is to become effective during such fiscal year, 

contained in laws, bills, and resolutions within the jurisdiction 
of a committee, is to be changed and direct that committee to 
determine and recommend changes to accomplish a change of 
such total amount ; 

(2) specify the total amount by which revenues are to be 
changed and direct that the committees having jurisdiction to 
determine and recommend changes in the revenue laws, bills, and 
resolutions to accomplish a change of such total amount ; 

(3) specify the amount by which the statutory limit on the 
public debt is to be changed and direct the committees having 
jurisdiction to recommend such change ; or 

(4) specify and direct any combination of the matters described 
in paragraphs (1), (2), and (3). 

Any such concurrent resolution may be reported, and the report ac- 
companying it may be filed, in either House notwithstanding that 
that House is not in session on the day on which such concurrent 
resolution is reported. 

(b) Completion of Action on Concurrent Resolution. — Not later 
than September 15 of each year, the Congress shall complete action 
on the concurrent resolution on the budget referred to in subsection 
(a). 



48 



BUDGET AND IMPOUKDMENT CONTROL ACT § 311 

(c) Keconciliation Process. — If a concurrent resolution is agreed 
to in accordance with subsection (a) containing directions to one or 
more committees to determine and recommend changes in laws, bills, 
or resolutions, and — 

( 1 ) only one committee of the House or the Senate is directed to 
determine and recommend changes, that committee shall promptly 
make such determination and recommendations and report to its 
House a reconciliation bill or reconciliation resolution, or both, 
containing such recommendations ; or 

(2) more than one committee of the House or the Senate is 
directed to determine and recommend changes, each such com- 
mittee so directed shall promptly make such determination and 
recommendations, whether such changes are to be contained in a 
reconciliation bill or reconciliation resolution, and submit such 
recommendations to the Committee on the Budget of its House, 
which upon receiving all such recommendations, shall report to 
its House a reconciliation bill or reconciliation resolution, or both, 
carrying out all such recommendations without ^nj substantive 
revision. 

For purposes of this subsection, a reconciliation resolution is a con- 
current resolution directing the Clerk of the House of Representatives 
or the Secretary of the Senate, as the case may be, to make specified 
changes in bills and resolutions which have not been enrolled. 

(d) Completion of Reconciliation Process. — Congress shall com- 
plete action on any reconciliation bill or reconciliation resolution 
reported under subsection (c) not later than September 25 of each 
year. 

(e) Procedure in the Senate. — 

(1) Except as provided in paragraph (2), the provisions of 
section 305 for the consideration in the Senate of concurrent reso- 
lutions on the budget and conference reports thereon shall also 
apply to the consideration in the Senate of reconciliation bills 
and reconciliation resolutions reported under subsection (c) and 
conference reports thereon. 

(2) Debate in the Senate on any reconciliation bill or resolu- 
tion reported under subsection (c), and all amendments thereto 
and debatable motions and appeals in connection therewith, shall 
be limited to not more than 20 hours. 

(f ) Congress May Not Adjourn Until Action Is Completed.— It 
shall not be in order in either the House of Representatives or the 
Senate to consider any resolution providing for the adjournment sine 
die of either House unless action has been completed on the concurrent 
resolution on the budget required to be reported under subsection (a) 
tor the fiscal year beginning on October 1 of such year, and, if a 
reconciliation bill or resolution, or both, is required to be reported 
under subsection (c) for such fiscal year, unless the Congress has com- 
pleted action on that bill or resolution, or both. 

NEW budget authority, NEW SPENDING AUTHORITY AND REVENUE 
legislation MUST BE WITHIN APPROPRIATE LEVELS 

Sec. 311 (a) Legislation Subject to Point of Order.— After the 
Congress has completed action on the concurrent resolution on the 



49 



§401 BUDGET AND IMPOUNDMENT CONTROL ACT 

budget required to be reported under section 310(a) for a fiscal year, 
and, if a reconciliation bill or resolution, or both, for such fiscal year 
are required to be reported under section 310(c), after that bill has 
been enacted into law or that resolution has been agreed to, it shall 
not be in order in either the House of Kepresentatives or the Senate to 
consider any bill, resolution, or amendment providing additional new 
budget authority for such fiscal year, providing new spending author- 
ity described in'section 401(c) (2) (C) to become effective during such 
fiscal year, or reducing revenues for sucli fiscal year, or any confer- 
ence report on any such bill or resolution, if — 

(1) the enactment of such bill or resolution as reported ; 

(2) the adoption and enactment of such amendment ; or 

(3) the enactment of such bill or resolution in the form recom- 
mended in such conference report ; 

would cause the appropriate level of total new budget authority or 
total budget outlays set forth in the most recently agreed to concur- 
rent resolution on the budget for such fiscal year to be exceeded, or 
would cause revenues to be less than the appropriate level of revenues 
set forth in such concurrent resolution. 

(b) Determination of Outlays and Eevenues. — For purposes of 
subsection (a), the budget outlays to be made during a fiscal year and 
revenues to be received during a fiscal year shall be determined on the 
basis of estimates made by the Committee on the Budget of the House 
of Representatives or the Senate, as the case may be. 

TITLE IV— ADDITIONAL PROVISIONS TO IMPROVE 
FISCAL PROCEDURES 

BILLS PROVIDING NEW SPENDING AUTHORITY 

Sec. 401. (a) Legislation Providing Contract or Borrowing Au- 
thority. — It shall not be in order in either the House of Representa- 
tives or the Senate to consider any bill or resolution which provides 
new spending authority described in subsection (c) (2) (A) or (B) 
(or any amendment which provides such new spending authority), 
unless that bill, resolution, or amendment also provides that such 
new spending authority is to be effective for any fiscal year only to 
such extent or in such amounts as are provided in appropriation Acts. 

(b) Legislation Providing Entitlement Authority. — 

(1) It shall not be in order in either the House of Representa- 
tives or the Senate to consider any bill or resolution which pro- 
vides new spending authority described in subsection (c) (2) (C) 
(or any amendment which provides such new spending authority) 
which is to become effective before the first day of the fiscal year 
which begins during the calendar year in which such bill or res- 
olution is reported. 

(2) If any committee of the House of Representatives or the 
Senate reports any bill or resolution which provides new spending 
authority described in subsection (c) (2) (C) which is to become 
effective during a fiscal year and the amount of new budget au- 
thority which will be required for such fiscal year if such bill or 
resolution is enacted as so reported exceeds the appropriate allo- 



50 



BUDGET AND IMPOUNDMENT CONTROL ACT §401 

cation of new budget authority reported under section 302(b) in 
connection with the most recently agreed to concurrent resolution 
on the budget for such fiscal year, such bill or resolution shall then 
be referred to the Committee on Appropriations of that House 
with instructions to report it, with the committee's recommenda- 
tions within 15 calendar days (not counting any day on which that 
House is not in session) beginning with the day following the day 
on which it is so referred. If the Committee on Appropriations of 
either House fails to report a bill or resolution referred to it under 
this paragraph within such 15-day period, the committee shall 
automatically be discharged from further consideration of such 
bill or resolution and such bill or resolution shall be placed on the 
appropriate calendar. 

(3) The Committee on Appropriations of each House shall have 
jurisdiction to report any bill or resolution referred to it under 
paragraph (2) with an amendment which limits the total amount 
of new spending authority provided in such bill or resolution. 

(c) Defixitioxs. — 

(1) For purposes of this section, the term "new spending au- 
thority" means spending authority not provided by law on the 
effective date of this section, including any increase in or addition 
to spending authority provided by law on such date. 

(2) For purposes of paragraph (1), the term "spending au- 
thority" means authority (whether temporary or permanent) — 

(A) to enter into contracts under which the United States 
is obligated to make outlays, the budget authority for which 
is not provided in advance by appropriation Acts ; 

(B) to incur indebtedness (other than indebtedness 
incurred under the Second Liberty Bond Act) for the repay- 
ment of which the United States is liable, the budget author- 
ity for which is not provided in advance by appropriation 
Acts; and 

(C) to make payments (including loans and grants), the 
budget authority for which is not provided for in advance 
by appropriation Acts, to any person or government if, under 
the provisions of the law containing such authority, the 
United States is obligated to make such payments to persons 
or governments who meet the requirements established by 
such law. 

Such term does not include authority to insure or guarantee the 
repayment of indebtedness incurred by another person or govern- 
ment. 

(d) Exceptions. — 

(1) Subsections (a) and (b) shall not apply to new spending 
authority if the budget authority for outlays which will result 
from such new spending authority is derived — 

(A) from a trust fund established by the Social Security 
Act (as in effect on the date of the enactment of this Act) ; 
or 

(B) from any other trust fund, 90 percent or more of the 
receipts of which consist or will consist of amounts (trans- 
ferred from the general fund of the Treasury) equivalent to 



§ 402 BUDGET AND IMPOUNDMENT CONTROL ACT 

amounts of taxes (related to the purposes for which such 
outlays are or will be made) received in the Treasury under 
specified provisions of the Internal Revenue Code of 1954. 

(2) Subsections (a) and (b) shall not apply to new spending 
authority which is an amendment to or extension of the State 
and Local Fiscal Assistance Act of 1972, or a continuation of 
the program of fiscal assistance to State and local governments 
provided by that Act, to the extent so provided in the bill or 
resolution providing such authority. 

(3) Subsections (a) and (b) shall not apply to new spending 
authority to the extent that — 

(A) the outlays resulting therefrom are made by an orga- 
nization which is (i) a mixed-ownership Government corpo- 
ration (as defined in section 201 of the Government 
Corporation Control Act), or (ii) a wholly owned Govern- 
ment corporation (as defined in section 101 of such Act) 
which is specifically exempted by law from compliance with 
any or all of the provisions of that Act ; or 

(B) the outlays resulting therefrom consist exclusively of 
the proceeds of gifts or bequests made to the United States 
for a specific purpose. 

REPORTING OF AUTHORIZING LEGISLATION 

Sec. 402. (a) Eequired Reporting Date. — Except as otherwise pro- 
vided in this section, it shall not be in order in either the House of 
Representatives or the Senate to consider any bill or resolution which, 
directly or indirectly, authorizes the enactment of new budget author- 
ity for a fiscal year, unless that bill or resolution is reported in the 
House or the Senate, as the case may be, on or before May 15 preced- 
ing the beginning of such fiscal year. 

(b) Emergency Waiver in the House. — If the Committee on Rules 
of the House of Representatives determines that emergency conditions 
require a waiver of subsection (a) with respect to any bill or resolu- 
tion, such committee may report, and the House may^ consider and 
adopt, a resolution waiving tne application of subsection (a) in the 
case of such bill or resolution. 

(c) Waiver in the Senate. — 

(1) The committee of the Senate which reports any bill or 
resolution may, at or after the time it reports such bill or resohi- 
tion, report a resolution to the Senate (A) providing for the 
waiver of subsection (a) with respect to such bill or resolution, 
and (B) stating the reasons why the waiver is necessary. The 
resolution shall tlien be referred to the Committee on the Budget 
of the Senate, That committee shall report the resolution to the 
Senate, within 10 daj^s after the resolution is referred to it (not 
counting any day on which the Senate is not in session) beginning 
with the day following the day on which it is so referred accom- ■ 
panied by that committee's recommendations and reasons for such 
recommendations with respect to the resolution. If the committee 
does not report the resolution within such 10-day period, it shall 
automatically be discharged from further consideration of the 
resolution and the resolution shall be placed on the calendar. 



52 



BUDGET AND IMPOUNDMENT CONTROL ACT §403 

(2) During the consideration of any such resolution, debate 
shall be limited to one hour, to be equally divided between, and 
controlled by, the majority leader and the minority leader or their 
designees, and the time on any debatable motion or appeal shall be 
limited to 20 minutes, to be equally divided between, and con- 
trolled by, the mover an the manager of the resolution. In the 
event the manager of the resolution is in favor of any sucli motion 
or appeal, the time in opposition thereto shall be controlled by 
the minority leader or his designee. Such leaders, or either of 
them, may, *^from the time under their control on the passage of 
such resolution, allot additional time to any Senator during the 
consideration of any debatable motion or appeal. No amendment 
to the resolution is in order. 

(3) If, after the Committee on the Budget has reported (or 
been discharged from further consideration of) the resolution, the 
Senate agrees to the resolution, then subsection (a) of this section 
shall notapply with respect to that bill or resolution referred to 
in the resolution. 

(d) Certain Bills axd Resolutioxs RECEm:D From Other 
House. — Notwithstanding the provisions of subsection (a), if under 
that subsection it is in order in the House of Representatives to con- 
sider a bill or resolution of the House, then it shall be in order to 
consider a companion or similar bill or resolution of the Senate ; and if 
under that subsection it is in order in the Senate to consider a bill or 
resolution of the Senate, then it shall be in order to consider a com- 
panion or similar bill of the House of Representatives. 

(e) ExcEPTioxs. — 

(1) Subsection (a) shall not apply with respect to new spend- 
ing authority described in section 401(c) (2) (C). 

(2) Subsection (a) shall not apply with respect to new budget 
authority authorized in a bill or resolution for any provision of 
the Social Security Act if such bill or resolution also provides 
new spending authority described in section 401 (c)(2)(C) which, 
under section 401(d) (i) (A), is excluded from the application of 
section 401(b). 

(f) Study of Existixg Spex-^dixg Authority and Permanent 
Appropriations. — The Committees on Appropriations of the House of 
Representatives and the Senate shall study on a continuing basis those 
provisions of law, in effect on the effective date of this section, which 
provide spending authority or permanent budget authority. Each 
committee shall, from time 'to time, report to its House its recommen- 
dations for terminating or modifying such provisions. 

an^alysis by cox^gressional budget office 

Sec. 403. The Director of the Congressional Budget Office shall, to 
the extent practicable, prepare for each bill or resolution of a public 
character reported by any committee of the House of Representatives 
or the Senate (except the Committee on Appropriations of each 
House) , and submit to such committee — 

(1) an estimate of the costs which would be incurred in carry- 
ing out such bill or resolution in the fiscal year in which it is to 
become effective and in each of the 4 fiscal years following 



53 



§ 404 and § 501 BUDGET AND IMPOUNDMENT CONTROL ACT 

such fiscal year, together with the basis for each such estimate; 
and, 

(2) a comparison of the estimate of costs described in para- 
graph (1) with any available estimate of costs made by such 
committee or by any Federal agency. 
The estimate and comparison so submitted shall be included in the 
report accompanying such bill or resolution if timely submitted to 
such committee before such report is filed. 

JURISDICTION OF APPROPRIATIONS COMMITTEES 

Sec. 404. (a) Aiviendment of House Rules. — Clause 2 of rule XI of 
the Rules of the House of Representatives is amended by redesignating 
paragraph (b) as paragraph (e) and by inserting after paragraph (a) 
the following new paragraphs : 

"(b) Rescission of appropriations contained in appropriation Acts 
(referred to in section 105 of title 1, United States Code). 

"(c) The amount of new spending authority described in section 
401(c) (2) (A) and (B) of the Congressional Budget Act of 1974 
which is to be effective for a fiscal year. 

"(d) New spending authority described in section 401(c)(2)(C) 
of the Congressional Budget Act of 1974 provided in bills and resolu- 
tions referred to the committee under section 401(b) (2) of that Act 
(but subject to the provisions of section 401 (b) (3) of that Act) ." 

(b) Amendment of Senate Rules. — Subparagraph (c) of para- 
graph 1 of rule XXV of the Standing Rules of the Senate is amended 
to read as follows : 

"(c) Committee on Appropriations to which committee shall be 
referred all proposed legislation, messages, petitions, memorials, and 
other matters relating to the following subjects : 

"1. Except as provided in subparagraph (r), appropriation of the 
revenue for the support of the Government. 

"2. Rescission of appropriations contained in appropriation Acts 
(referred to in section 105 of title 1, United States Code). 

"3. The amount of new spending authority described in section 401 
(c) (2) (A) and (B) of the Congressional Budget Act of 1974 pro- 
vided in bills and resolutions referred to the committee under section 
401(b) (2) of that Act (but subject to the provisions of section 401 
(b)(3) of that Act). 

"4. Xew advance spending authority described in section 401(c) 
(2) (C) of the Congressional Budget Act of 1974 provided in bills 
and resolutions referred to the committee under section 401(b) (2) of 
that Act (but subject to the provisions of section 401(b) (3) of that 
Act)." 

TITLE V— CHANGE OF FISCAL YEAR 

FISCAL YEAR TO BEGIN OCTOBER 1 

Sec. 501. Section 237 of the Revised Statutes (31 U.S.C. 1020) is 
amended to read as follows : 

"Sec. 237. (a) The fiscal year of the Treasury of the United States, 
in all matters of accounts, receipts, expenditures, estimates, and 
appropriations — 



54 



BUDGET AND IMPOUNDMENT CONTROL ACT §503 

"(1) shall, through June 30, 1976, commence on July 1 of each 
year and end on June 30 of the f ollowincr year ; and 

"(2) shall, beginning on October 1, i976, commence on Octo- 
ber 1 of each year and end on September 30 of the following year. 
"(b) All accounts of receipts and expenditures required by law to 
be published annually shall be prepared and published for each fiscal 
year as established by subsection (a) ." 

TRANSITION TO NEW FISCAL YEAR 

Sec. 502. (a) As soon as practicable, the President shall prepare 
and submit to the Congress — 

(1) after consultation with the Committees on Appropriations 
of the House of Eeprescntatives and the Senate, budget esti- 
mates for the United States Government for the period com- 
mencing July 1, 1976, and ending on September 30, 1976, in such 
form and detail as he may determine : and 

(2) proposed legislation he considers appropriate with respect 
to changes in law necessary to provide authorizations of appro- 
priations for that period. 

(b) Tlie Director of the Office of Management and Budget shall 
provide by regulation, order, or otherwise for the orderly transition 
by all departments, agencies, and instrumentalities of the United 
States Government and the government of the District of Columbia 
from the use of tlie fiscal year in effect on the date of enactment of 
this Act to the use of the new fiscal year prescribed by section 237 
(a) (2) of the Eevised Statutes. The Director shall prepare and sub- 
mit to the Congress such additional proposed legislation as he con- 
siders necessary to accomplisli this objective. 

(c) TJie Director of the Office of Management and Budget and 
the Director of the Congressional Budget Office jointly shall conduct 
a study of the feasibility and advisability of submitting the Budget 
or portions thereof, and enacting new budget authority or portions 
thereof, for a fiscal year during the regular session of the Congress 
which begins in the year preceding the year in which such fiscal year 
begins. The Director of the Office of Management and Budget and 
the Director of the Congressional Budget Office each shall submit a 
report of the results of the study conducted by them, together with 
his own conclusions and recommendations, to the Congress not later 
than 2 years after the effective date of this subsection. 

ACCOUNTING PROCEDURES 

Sec. 503. (a) Subsection (a)(1) of the first section of the Act 
entitled "An Act to simplify accounting, facilitate the payment of 
obligations, and for other purposes", approved July 25, 1956, as 
amended (31 U.S.C. 701) , is amended to read as follows : 

"(1) The obligated balance shall be transferred, at the time 
specified in subsection (b) (1) of this section, to an appropriation 
account of the agency or subdivision thereof responsible for the 
liquidation of the obligation, in which account shall be merged 
the amounts so transferred from all appropriation accounts for 
the same general purposes ; and". 



55 



§504 BUDGET AND IMPOUNDMENT CONTROL ACT 

(b) Subsection (b) of such section is amended to read as follows: 
"(b) (1) Any obligated balance referred to in subsection (a) (1) of 
this section shall be transferred as follows : 

"(A) for any fiscal year or years ending on or before June 30. 
1976, on that June 30 which falls in the first month of June 
which occurs twenty-four months after the end of such fiscal 
year or years ; and 

"(B) for the period commencing on July 1, 1976, and ending 
on September 30, 1976, and for any fiscal year commencing on or 
after October 1, 1976, on September 30 of the second fiscal yenv 
following that period or the fiscal year or j^ears, as the case may 
be, for which the appropriation is available for obligation. 
"(2) The withdrawals required by subsection (a) (2) of this section 
shall be made — 

"(A) for any fiscal year ending on or before June 30, 1976, not 
later than September 30 of the fiscal year immediately following 
the fiscal year in which the period of availability for obligation 
expires; and 

"(B) for the period commencing on July 1, 1976, and ending 
on September 30, 1976, and for any fiscal year commencing on or 
after October 1, 1976, not later than November 15 following such 
period or fiscal year, as the case may be, in which the period of 
availability for obligation expires." 

CON\TERSION OF AUTHORIZATIONS OF APPKOPRIATIOXS 

Sec. 504. Any law providing for an authoriziation of appropriations 
commencing on July 1 of a year shall, if that year is any year after 
1975. be considered as meaning October 1 of that year. Any law provid- 
ing for an authorization of appropriations ending on June 30 of a 
year shall, if that year is any year after 1976, be considered as meaning 
September 30 of that year. Any law providing for an authorization of 
appropriations for the fiscal year 1977 or any fiscal year thereafter 
shall be construed as referring to that fiscal year ending on Septem- 
ber 30 of the calendar year having the same calendar year number as 
the fiscal year number. 

REPEALS 

Sec. 505. The following provisions of law are repealed : 

(1) the ninth paragraph under the headings "Legislative Estab- 
lishment", "Senate", of the Deficiencv Appropriation Act, fiscal 
year 1934 (48 Stat. 1022 ; 2 U.S.C. 66) ; and 

(2) the proviso to the second paragraph under the headings 
"House of Representatives", "Salaries, Mileage, and Expenses of 
Members", of the Legislative- Judiciary Appropriation Act, 1955 
(68 Stat. 400; 2 U.S.C. 81). 

TECHNICAL AMENDMENT 

Sec. 506. (a) Section 105 of title 1, United States Code, is amended 
by striking out "June 30" and inserting in lieu thereof "September 30". 

(b) The provisions of subsection (a) of this section shall be effective 
with respect to Acts making appropriations for the support of the 
Government for any fiscal year commencing on or after October 1, 1976. 



56 



BUDGET AND IMPOUNDMENT CONTROL ACT §601 

TITLE VI— AMENDMENTS TO BUDGET AND 
ACCOUNTING ACT, 1921 

MATTERS TO BE IXCEUDED IX PRESIDEXT'S BUDGET 

Sec. 601. Section 201 of the Budget and Accounting Act, 1921 (31 
U.S.C. 11). is amended by adding at the end thereof the following new 
subsections : 

"(d) The Budget transmitted pursuant to subsection (a) for each 
fiscal year shall set forth separately the items enumerated in section 
301(a) (l)-(5) of tlie Congressional Budget Act of 1974. 

"(e) The Budget transmitted pursuant to subsection (a) for each 
fiscal year shall set forth the levels of tax expenditures under existing 
law for such fiscal year (the tax expenditures budget), taking into 
account projected economic factors, and any changes in such existing 
levels based on proposals contained in such Budget. Eor purposes of 
this subsection, the terms 'tax expenditures' and 'tax expenditures 
budget' have the meanings given to them by section 3(a) (3) of the 
Congressional Budget Act of 1974. 

"(f) The Budget transmitted pursuant to subsection (a) for each 
fiscal year shall contain — 

"(1) a comparison, for the last completed fiscal year, of the 
total amount of outlays estimated in the Budget transmitted pur- 
suant to subsection (a) for each major program involving uncon- 
trollable or relatively uncontrollable outlays and the total amount 
of outlays made under each such major program during such 
fiscal year : 

"(2) a comparison, for the last completed fiscal year, of the 
total amount of revenues estimated in the Budget transmitted 
pursuant to subsection (a) and the total amount of revenues re- 
ceived during such year, and, with respect to each major revenue 
source, the amount of revenues estimated in the Budsjet trans- 
mitted pursuant to subsection (a) and the amount of revenues 
received durino- such year ; and 

"(3) an analysis and explanation of the difference between each 
amoiHit set forth pursuant to paragraphs (1) and (2) as the 
amount of outlays or revenues estimated in the Budget submitted 
under subsection (a) for such fiscal year and the corresponding 
amount set forth as the amount of outlays m.ade or revenues 
received during such fiscal year, 
"(of) Tlie Pi-esident shall transmit to the Congress, on or before 
April 10 and July 15 of each year, a statement of all amendments to or 
revisioTw in the budget authority requested, the estimated outlays, and 
the esiimated receipts for the ensuing fiscal year set forth in the 
Budget transmitted pursuant to subsection (a) (including any previ- 
ous amriuhnents or revisions proposed on behalf of the executive 
brancli) that he deems necessary and appropriate based on the most 
currciit information available. Such statement sliall contain the effect 
of such a\nen(lments and revisions on the summary data submitted 
under sv.bsection (a) and shall include such supporting detail as is 
pra(4ic;ahle. The statement transmitted on or before July 15 of an}^ 
year m:\y be included in the supplemental summary required to be 
transmii tod under subsection (b) during such year. The Budget trans- 
mit! e^i Vc Ihe Congress pursuant to subsection (a) for -any- fiscal year. 



57 



§602 BUDGET AND IMPOUNDMENT CONTROL ACT 

or the supporting detail transmitted in connection therewith, shall 
include a statement of air such amendments and revisions with respect 
to the fisca-l year in progress made before the date of transmission of 
such Budget, 

"(h) The Budget transmitted pursuant to subsection (a) for each 
fiscal year shall include information with respect to estimates of appro- 
priations for the next succeeding fiscal year for grants, contracts, or 
other payments under any program for w^hich there is an authoriza- 
tion of appropriations for such succeeding fiscal year and such appro- 
priations are authorized to be included in an appropriation Act for 
the fiscal year preceding the fiscal year in which the appropriation is to 
be available for obligation. 

"(i) The Budget transmitted pursuant to subsection (a) for each 
fiscal year, beginning with the fiscal year ending September 30, 1979, 
shall contain a presentation of budget authority, proposed budget 
authority, outlays, proposed outlays, and descriptive information in 
terms of — 

" ( 1 ) a detailed structure of national needs which shall be used 
to reference all agency missions and programs ; 

"(2) agency missions ; and 

"(3) basic programs. 
To the extent practicable, each agency shall furnish information in 
support of its budget requests in accordance with its assigned missions 
in terms of Federal functions and subfunctions, including mission 
responsibilities of component organizations, and shall relate its pro- 
grams to agency missions." 

MIDYEAR REVIEW 

Sec. 602. Section 201 of the Budget and Accounting Act, 1921 (31 
U.S.C. 11), is amended by striking out "on or before June 1 of each 
year, beginning with 1972" and inserting in lieu thereof "on or before 
July 15 of each year". 

FIVE-YEAR BUDGET PROJECTIONS 

Sec. 603. Section 201(a) of the Budget and Accounting Act, 1921 
(31 U.S.C. 11) J is amended— 

(1) by inserting after "ensuing fiscal year" in paragraph (5) 
"and projections for the four fiscal years immediately following 
the ensuing fiscal year" ; 

(2) by striking out "such year" in paragraph (5) and inserting 
in lieu thereof "such years" ; and 

(3) by inserting after "ensuing fiscal year" in paragraph (6) 
"and projections for the four fiscal years immediately following 
the ensuing fiscal year". 

ALLOWANCES FOR SUPPLEMENTAL BUDGET AUTHORITY AND 
UNCONTROLLABLE OUTLAYS 

Sec. 604. Section 201(a) of the Budget and Accounting Act, 1921 
(31 U.S.C. 11) , is further amended— 

(1) by striking out "and" at the end of paragraph (11) ; 



58 



BUDGET AND IMPOUNDMENT CONTROL ACT §607 

(2) by striking out the period at the end of paragraph (12) 
and inserting in lieu thereof " ; and" ; and 

(3) by adding at the end thereof the following new paragraph : 
"(13) an allowance for additional estimated expenditures and 

proposed appropriations for the ensuing fiscal year, and an allow- 
ance for unanticipated uncontrollable expenditures for the en- 
suing fiscal year." 

BUDGET DATA BASED ON CONTINUATION OF EXISTING LEVEL OF SERVICES 

Sec. 605. (a) On or before November 10 of each year (beginning 
with 1975) , the President shall submit to the Senate and the House of 
Kepresentatives the estimated outlays and proposed budget authority 
which would be included in the Budget to be submitted pursuant to 
section 201 of the Budget and Accounting Act, 1921, for the ensuing 
fiscal year if all programs and activities were carried on during such 
ensuing fiscal year at the same level as the fiscal year in progress and 
without policy changes in such programs and activities. The estimated 
outlays and proposed budget authority submitted pursuant to this 
section shall be shown by function and subf unctions (in accordance 
with the classifications in the budget summary table entitled "Budget 
Authority and Outlays by Function and Agency") , by major programs 
within each such function, and by agency. Accompanying these esti- 
mates shall be the economic and programmatic assumptions underlying 
the estimated outlays and proposed budget authority, such as the rate 
of inflation, the rate of real economic growth, the unemployment rate, 
program caseloads, and pay increases. 

(b) The Joint Economic Committee shall review the estimated out- 
lays and proposed budget authority so submitted, and shall submit to 
the Committees on the Budget of both Houses an economic evaluation 
thereof on or before December 31 of each year. 

STUDY OF OFF-BUDGET AGENCIES 

Sec. 606. The Committees on the Budget of the House of Represent- 
atives and the Senate shall study on a continuing basis those pro- 
visions of law which exempt agencies of the Federal Government, or 
any of their activities or outlays, from inclusion in the Budget of the 
United States Government transmitted by the President under section 
201 of the Budget and Accounting Act, 1921. Each committee shall, 
from time to time, report to its House its recommendations for termi- 
nating or modifying such provisions. 

TEAR-AHEAD REQUESTS FOR AUTHORIZATION OF NEW BUDGET AUTHORITY 

Sec. 607. Notwithstanding any other provision of law, any request 
for the enactment of legislation authorizing the enactment of new 
budget authority to continue a program or activity for a fiscal year 
(beginning with the fiscal year commencing October 1, 1976) shall be 
submitted to the Congress not later than May 15 of the year preceding 
the year in which such fiscal year begins. In the case of a request for 
the enactment of legislation authorizing the enactment of new budget 
authority for a new program or activity which is to continue for more 
than one fiscal year, such request shall be submitted for at least the first 
2 fiscal years. 

59 



§701 BUDGET AND IMPOUNDMENT CONTROL ACT 

TITLE VII— PROGRAM REVIEW AND EVALUATION 

REVIEW AXD EVALUATION BY STANDING COMMITTEES 

Sec. 701. Section 136(a) of the Legislative Reorganization Act of 
1946 (2 U.S.C. 190d) is amended by adding at the end thereof the fol- 
lowing new sentences : "Such committees may carry out the required 
analysis, appraisal, and evaluation themselves, or by contract, or may 
require a Government agency to do so and furnish a report thereon to 
the Congress. Such committees may rely on such techniques as pilot 
testing, analysis of costs in comparison with benefits, or provision for 
evaluation after a defined period of time." 

review and EVALUATION BY THE COMPTROLLER GENERAL 

Sec. 702. (a) Section 204 of the Legislative Reorganization Act of 
1970 (31 U.S.C. 1154) is amended to read as follows : 

"review and evaluation 

"Sec. 204. (a) The Comptroller General shall review and evaluate 
the results of Government programs and activities carried on under 
existing law when ordered by either House of Congress, or upon his 
own initiative, or when requested by any committee of the House of 
Representatives or the Senate, or any joint committee of the two 
Houses, having jurisdiction over such programs and activities. 

"(b) The Comptroller General, upon request of any committee of 
either House or any joint committee of the two Houses, shall — 

"(1) assist such committee or joint committee in developing a 
statement of legislative objectives and goals and methods tor 
assessing and reporting actual program performance in relation to 
such legislative objectives and goals. Sucn statements shall include, 
but are not limited to, recommendations as to methods of assess- 
ment, information to be reported, responsibility for reporting, 
frequency of reports, and feasibility of pilot testing ; and 

"(2) assist such committee or joint committee in analyzing and 
assessing program reviews or evaluation studies prepared by and 
for any Federal agency. 
Upon request of any Member of either House, the Comptroller Gen- 
eral shall furnish to such Member a copy of any statement or other 
material compiled in carrying out paragraphs (1) and (2) which has 
been released by the committee or joint committee for which it was 
compiled. 

" (c) The Comptroller General shall develop and recommend to the 
Congress methods for review and evaluation of Government programs 
and activities carried on under existing law. 

"(d) In carrying out his responsibilities under this section, the 
Comptroller General is authorized to establish an Office of Program 
Review and Evaluation within the General Accounting Office. The 
Comptroller General is authorized to employ not to exceed ten experts 
on a permanent, temporary, or intermittent basis and to obtain serv- 
ices as authorized by section 3109 of title 5, United States Code, but in 
either case at a rate (or the daily equivalent) for individuals not to 
exceed that prescribed, from time to time, for level V of the Executive 
Schedule under section 5316 of title 5, United States Code. 

60 



BUDGET AND IMPOUNDMENT CONTROL ACT §703 and §201 

"(e) The Comptroller General shall include in his annual report to 
the Congress a review of his activities under this section, including 
his recommendations of methods for review and evaluation of Govern- 
ment programs and activities under subsection (c)." 

(b) Item 204 in the table of contents of such Act is amended to read 
as follows : 
*'Sec. 204. Review and evaluation." 

CONTINUING STUDY OF ADDITIONAL BUDGET KEFORM PROPOSALS 

Sec. 703. (a) The Committees on the Budget of the House of Kep- 
resentatives and the Senate shall study on a continuing basis proposals 
designed to improve and facilitate methods of congressional budget- 
making. The proposals to be studied shall include, but are not limited 
to, proposals for — 

(1) improving the information base required for determining 
the effectiveness of new programs by such means as pilot testing, 
survey research, and other experimental and analytical tech- 
niques : 

(2) improving analytical and systematic evaluation of the ef- 
fectiveness of existing programs ; 

(3) establishing maximum and minimum time limitations for 
program authorization ; and 

(4) developing techniques of human resource accounting and 
other means of providing noneconomic as well as economic eval- 
uation measures. 

(b) The Committee on the Budget of each House shall, from time 
to time, report to its House the results of the study carried on by it 
under subsection (a) , together with its recommendations. 

(c) Nothing in this section shall preclude studies to improve the 
budgetary process by any other committee of the House of Represent- 
atives or the Senate or any joint committee of the Congress. 

TITLE VIII— FISCAL AND BUDGETARY INFORIVIATION 
AND CONTROLS 

AMENDMENT TO LEGISLATIVE REORGANIZATION ACT OF 19 70 

Sec. 801. (a) So much of title II of the Leglislative Reorganization 
Act of 1970 (31 U.S.C. chapter 22) as precedes section 204 thereof is 
amended to read as follows : 

"TITLE II— FISCAL AND BUDGETARY INFORMATION 

AND CONTROLS 

"Part I — Fiscal, Budgetary, and Program-Related Data and 

Information 

"federal fiscal, budgetary, and program-related data and 
il^ormation systems 

"Sec. 201. The Secretary of the Treasury and the Director of the 
Office of ^Management and Budget, in cooperation with the Comptroller 
General of the United States, shall develop, establish, and maintain, 

61 



§202 BUDGET AND IMPOUNDMENT CONTROL ACT 

for use by all Federal agencies, standardized data processing and 
information systems for fiscal, budgetary, and program-related data 
and information. The development, establishment, and maintenance 
of such systems shall be carried out so as to meet the needs of the 
various branches of the Federal Government and, insofar as practica- 
ble, of governments at the State and local level. 

"standardization of terminology, definitions, classifications, and 

CODES FOR fiscal, BUDGETARY, AND PROGRAM-RELATED DATA AND 

information 

"Sec. 202. (a) (1) The Comptroller General of the United States, in 
cooperation with the Secretary of the Treasury, the Director of the 
Office of Management and Budget, and the Director of the Con- 
gressional Budget Office, shall develop, establish, maintain, and pub- 
lish standard terminology, definitions, classifications, and codes for 
Federal fiscal, budgetary, and program-related data and information. 
The authority contained in this section shall include, but not be limited 
to, data and information pertaining to Federal fiscal policy, revenues, 
receipts, expenditures, functions, programs, projects, and activities. 
Such standard terms, definitions, classifications, and codes shall be 
used by all Federal agencies in supplying to the Congress fiscal, 
budgetary, and program-related data and information. 

"(2) The Comptroller General shall submit to the Congress, on or 
before June 30, 1975, a report containing the initial standard termi- 
nology, definitions, classifications, and codes referred to in paragraph 
(1) , and shall recommend any legislation necessary to implement them. 
After June 30, 1975, the Comptroller General shall submit to the Con- 
gress additional reports as he may think advisable, including any 
recommendations for any legislation he may deem necessary to further 
the development, establishment, and maintenance, modification, and 
executive implementation of such standard terminology, definitions, 
classifications, and codes. 

"(b) In carrying out this responsibility, the Comptroller General 
of the United States shall give particular consideration to the needs of 
the Committees on the Budget of the House and Senate, the Commit- 
tees on Appropriations of the House and Senate, the Committee on 
AYays and IMeans of the House, the Committee on Finance of the 
Senate, and the Congressional Budget Office. 

"(c) The Comptroller General of the United States shall conduct a 
continuing program to identify and specify the needs of the commit- 
tees and Members of the Congress for fiscal, budgetary, and program- 
related information to support the objectives of this part. 

"(d) The Comptroller General shall assist committees in developing 
their information needs, including such needs expressed in legislative 
requirements, and shall monitor the various recurring reporting 
requirements of the Congress and committees and make recommenda- 
tions to the Congress and committees for changes and improvements 
in their reporting requirements to meet congressional information 
needs ascertained by the Comptroller General, to enhance their use- 
fulness to the congressional users and to eliminate duplicative or 
unneeded reporting. 



62 



BUDGET AND IMPOUNDMENT CONTROL ACT J 203 

"(e) On or before September 1, 1974, and each year thereafter, the 
Comptroller General shall report to the Congress on needs identified 
and specified under subsection (c) ; the relationship of these needs to 
the existing reporting requirements ; the extent to which the executive 
branch reporting presently meets the identified needs; the specification 
of changes to standard classifications needed to meet congressional 
needs; the activities, progress and results of his activities under sub- 
section (d) ; and the progress that the executive branch has made 
dui-ing the past year. 

''(f) On or before March 1, 19T5, and each year thereafter, the 
Director of the Office of Management and Budget and the Secretary 
of the Treasury shall report to the Congress on their plans for address- 
ing the needs identified and specified under subsection (c), including 
plans for implementing changes to classifications anel codes to meet 
the information needs of the Congress as well as the status of prior 
year system and classification implementations. 



ERNMEXTS OF FKDERAL FISCAL, BUDGETARY, AND PROGRAM -REL.\TED DATA 
AND INFORMATION 

"Sec. 203. (a) Upon request of any committee of either House, of 
any joint committee of the two Houses, of the Comptroller General, 
or of the Director of the Congressional Budget Office, the Secretary of 
the Treasury, the Director of the Office of Management and Budget, 
and the heads of the various executive agencies shall — 

"(1) furnish to such committee or joint committee, the Comp- 
troller General, or the Director of the Congressional Budget Office 
information as to the location and nature of available fiscal, 
budgetary, and program-related data and information : 

"(2) to the extent practicable, prepare summary tables of such 
data and information and any related information deemed neces^ 
sary by such committee or joint committee, the Comptroller Gen- 
eral, or the Director of the Congressional Budget Office; and 

"(3) furnish to such committee or joint committee, the Comp- 
troller General, or the Director of the Congressional Budget Office 
any program evaluations conducted or commissioned by any execu- 
tive agency. 
"(b) The Comptroller General, in cooperation with the Director 
of tlie Congressional Budget Office, the Secretary of the Treasury, and 
the Director of the Office of iSIanagement and Budget, shall — 

"(1) develop, establish, and maintain an up-to-date inventory 
and directory of sources and information systems containing fis- 
cal, budgetary, and program-related data and information and a 
brief description of their content ; 

"(2) provide, upon request, assistance to committees, joint com- 
mittees, and Members of Congress in securing Federal fiscal, 
budgetary, and program-related data and information from the 
sources identified in such inventory and directory ; and 

"(3) furnish, upon request, assistance to committees and joint 
committees of Congress and, to the extent practicable, to Members 
of Congress in appraising and analyzing fiscal, budgetary, and 



63 



§802 BUDGET AND IMPOUNDMENT CONTROL ACT 

program-related data and information secured from the sources 
identified in such inventory and directory. 

"(c) The Comptroller General and the Director of the Congres- 
sional Budget Office shall, to the extent they deem necessary, develop, 
establish, and maintain a central file or files of the data and infor- 
mation required to carry out the purposes of this title. Such a file or 
files shall be established to meet recurring requirements of the Con- 
gress for fiscal, budgetary, and program-related data and information 
and shall include, but not be limited to, data and information pertain- 
ing to budget requests, congressional authorizations to obligate and 
spend, apportionment and reserve actions, and obligations and expend- 
itures. Such file or files and their indexes shall be maintained in such a 
manner as to facilitate their use by the committees of both Houses, 
joint committees, and other congressional agencies through modem 
data processing and communications techniques. 

"(d) The Director of the Office of Management and Budget, in 
cooperation with the Director of the Congressional Budget Office, 
the Comptroller General, and appropriate representatives of State 
and local governments, shall provide, to the extent practicable. State 
and local governments such fiscal, budgetary, and program-related 
data and information as may be necessary for the accurate and timely 
determination by these governments of the impact of Federal 
assistance upon their budgets." 

(b) The table of contents of the Legislative Keorganization Act 
of 1970 is amended by striking out — 

"TITLE II— FISCAL CONTROLS 

"Pabt 1 — ^Budgetary and Fiscal Information and Data 

"Sec. 201. Budgetary and fiscal data processing system. 

"Sec. 202. Budget standard classifications. 

"Sec. 203. Availability to Congress of budgetary, fiscal, and related data." 

and inserting in lieu thereof — 

"TITLE II— FISCAL AND BUDGETARY INFORMATION AND CONTROLS 

"Part 1 — Fiscal, Budgetaby, and Peogbam-Related Data and Infobmation 

"Sec. 201. Federal fiscal, budgetary, and program-related data and information 
systems. 

"Sec. 202. Standardization of terminology, definitions, classifications, and codes 
for fiscal, budgetary, and program-related data and information. 

"Sec. 203. Availability to and use by the Congress and State and local govern- 
ments of Federal fiscal, budgetary, and program-related data and 
information." 

CHANGES IN FUNCTIONAL CATEGORIES 

Sec. 802. Any change in the functional categories set forth in the 
Budget of the United States Government transmitted pursuant to 
section 201 of the Budget and Accounting Act, 1921, shall be made 
only in consultation with the Committees on Appropriations and the 
Budget of the House of Eepresentatives and Senate. 



64 



BUDGET AND IMPOUNDMENT CONTROL ACT §901 

TITLE IX— MISCELLANEOUS PROVISIONS; EFFECTIVE 

DATES 

AMENDMENTS TO RULES OF THE HOUSE 

Sec. 901. (a) Eule XI of the Rules of the House of Representatives 
(as amended by section 101(c) of this Act) is amended by inserting 
immediately after clause 22 the following new clause : 

"22A. The respective areas of legislative jurisdiction under this rule 
are modified by title I of the Congressional Budget Act of 1974." 

(b) Paragraph (c) of clause 29 of Rule XI of the Rules of the 
House of Representatives (as redesignated by section 101(c) of this 
Act) is amended by inserting "the Committee on the Budget," immedi- 
ately after "the Committee on Appropriations ,". 

(c) Subparagraph (5) of paragraph (a) of clause 30 of Rule XI 
of the Rules of the House of Representatives (as so redesignated) is 
amended by inserting "and the Committee on the Budget" immedi- 
ately before the period at the end thereof. 

(d) Subparagraph (4) of paragraph (b) of clause 30 of Rule XI 
of the Rules of the House of Representatives (as so redesignated) is 
amended by inserting "and the Committee on the Budget" immedi- 
ately before the period at the end hereof. 

(e) Paragraph (d) of clause 30 of Rule XI of the Rules of the 
House of Representatives (as so redesignated) is amended by strildng 
out "the Committee on Appropriations may appoint" and inserting in 
lieu thereof "the Committee on Appropriations and the Committee on 
the Budget may each appoint". 

(f ) Clause 32 of Rule XI of the Rules of the House of Representa- 
tives (as so redesignated) is amended by inserting "the Committee on 
the Budget," immediately after "the Committee on Appropriations,". 

(g) Paragraph (a) of clause 33 of Rule XI of the Rules of the 
House of Representatives (as so redesignated) is amended by insert- 
ing "and the Committee on the Budget" immediately after "the Com- 
mittee on Appropriations". 

CONFORMING AMENDMENTS TO STANDING RULES OF THE SENATE 

Sec. 902. Paragraph 1 of rule XXV of the Standing Rules of the 
Senate is amended — 

(1) by striking out "Revenue" in subparagraph (h)l and 
inserting in lieu thereof "Except as provided in the Congressional 
Budget Act of 1974, revenue" ; 

(2) by striking out "The" in subparagraph (h)2 and inserting 
in lieu thereof "Except as provided in the Congressional Budget 
Act of 1974, the"; and 

(3) by striking out "Budget" in subparagraph (j) (1) (A) and 
inserting in lieu thereof "Except as provided in the Congressional 
Budget Act of 1974, budget". 



65 



1 903 BUDGET AND IMPOUNDMENT CONTROL ACT 

AMENDMENTS TO LEGISLATIVE REORGANIZATION ACT OP 1946 

Sec. 903. (a) Section 134(c) of the Legislative Reorganization Act 
of 1946 (2 U.S.G. 190b (b) ) is amended by inserting "or the Committee 
on the Budget" after "Appropriations". 

(b) Section 136 (c> of such Act (2 U.S.C. 190d(c) ) is amended by 
striking out "Committee on Appropriations of the Senate and the 
Committees on Appropriations," wad inserting in lieu thereof "Com- 
mittees on Appropriations and the Budget of the Senate and the 
Committees on Appropriations, the Budget,". 

EXERCISE OF RULEMAKINO POWERS 

^ Sec. 904. (a) The provisions of this title (except section 905) and of 
titles I, III, and IV and the provisions of sections 606, 701, 703, and 
1017 are enacted by the Congress — 

(1) as an exercise of the rulemaking power of the House of 
Representatives and the Senate, respectively, and as such they 
shall be considered as part of the rules of each House, respectively, 
or of that House to which they specifically apply, and such rules 
shall supersede other rules only to the extent that they are incon- 
sistent therewith; and 

(2) with full recognition of the constitutional right of either 
House to change such rules (so far as relating to such House) at 
any time, in the same manner, and to the same extent as in the 
case of any other rule of such House. 

(b) Any provision of title III or IV may be waived or suspended 
in the Senate by a majority vote of the Members voting, a quorum 
being present, or by the unanimous consent of the Senate. 

(c) Appeals in the Senate from the decisions of the Chair relating 
to any provision of title III or IV or section 1017 shall, except as other- 
wise provided therein, be limited to 1 hour, to be equally divided 
between, and controlled by, the mover and the manager of the resolu- 
tion, concurrent resolution, reconciliation bill, or recission bill, as the 
case may be. 

EFFECTIVE DATES 

Sec. 905. (a) Except as provided in this section, the provisions of 
this Act shall take effect on the date of its enactment. 

(b) Title II (except section 201 (a) ) , section 403, and section 502(c) 
shall take effect on the day on which the first Director of the Congres- 
sional Budget Office is appointed in section 201 (a) . 

(c) Except as provided under section 906, title III and section 402 
shall apply with respect to the fiscal year beginning on October 1, 1976, 
and succeeding fiscal years, and section 401 shall take effect on the first 
day of the second regular session of the Ninety-fourth Congress. 

(d) The amendments to the Budget and Accounting Act, 1921, made 
by sections 601, 603, and 604 shall apply with respect to the fiscal year 
beginning on July 1, 1975, and succeeding fiscal years, except that sec- 
tion 201(g) of such Act (as added by section 601) shall apply with 
respect to the fiscal year beginning on October 1, 1976, and succeeding 
fiscal years and section 201 (i) of such Act (as added by section 601) 
shall apply with respect to the fiscal year beginning on October 1, 1978, 



66 



BUDGET AND IMPOUNDMENT CONTROL ACT ( 906 and § 1002 

and succeeding fiscal years, Tlie amendment to such Act made by sec- 
tion 602 shall apply with respect to the fiscal year beginning on Octo- 
ber 1, 1^6, and succeeding fiscal years. 

AEPLICATION OF CONGRESSIONAL BUDGET PROCESS TO FISCAL TEAR 19 7S 

Sec. 906. If the Committees on the Budget of the House of Repre- 
sentatives and the Senate both agree that it is feasible to report and 
act on a concurrent resolution on the budget referred to in section 301 
(a) , or to apply any provision of title IH or section 401 or 402, for the 
fiscal year beginning on July 1, 1975, and submit reports of such agree- 
ment to their respective Houses, then to the extent and in the manner 
specified in such reports, the provisions so specified and section 202(f) 
shall apply with respect to such fiscal year. If any provisicMi so specified 
<M>ntains a date, such reports shall also ^>ecify a substitute date. 

TITLE X— IMPOUNDMENT CONTROL 

Part A — General Provisions 

disclaimer 

Sec. 1001. Nothing contained in this Act, or in any amendments 
made by this Act, shall be construed as — 

(1) asserting or conceding the constitutional powers or limita- 
tions of either the Congress or the President; 

(2) ratifying or approving any impoundment heretofore or 
hereafter executed or approved by the President or any other 
Federal officer or employee, except insofar as pursuant to statu- 
tory authorization tlien in effect ; 

(3) affecting in any way the claims or defenses of any party to 
litigation concerning any impoundment ; or 

(4) superseding any provision of law which requires the obliga- 
tion of budget authority or the making of outlays thereunder. 

AMENDMENT TO ANTIDEFICIENCY ACT 

Sec. 1002. Section 3679(c) (2) of the Revised Statutes, as amended 
(31 U.S.C. 665) , is amended to read as follows : 

"(2) In apportioning any appropriation, reserves may be estab- 
lished solely to provide for contingencies, or to effect savings whenever 
savings are made possible by or through changes in requirements or 
greater efficiency of operations. Whenever it is determined by an officer 
designated in subsection (d) of this section to make apportionments 
and reapportionments that any amount so reserved will not be required 
to carry out the full objectives and scope of the appropriation con- 
<'erned, he shall recommend the rescission of such amount in the man- 
ner provided in the Budget and Accounting Act, 1921, for estimates 
of appropriations. Except as specifically provided by particular appro- 
priations Acts or other laws, no reserves shall be established other than 
as authorized by this subsection. Reserves established pursuant to this 
subsection shall be reported to the Congress in accordance with the 
Impoundment Control Act of 1974." 



67 



§ 1003 and § 1012 iBUDGET AND IMPOUNDMENT CONTROL ACT 

REPEAL OP EXISTING IMPOUNDMENT REPORTING PROYISION 

Sec. 1003. Section 203 of the Budget and Accounting Procedures Act 
of 1950 is, repealed. 

Part B — Congressional Consideration of Proposed Bescissions, 
Reservations, and Deferrals of Budget Authoritt 

definitions 

Sec. 1011. For purposes of tliis part — 

( 1 ) "deferral of budget authority" includes— 

(A) withholding or delaying the obligation or expenditure 
of budget authority (whether by establishing reserves or 
otherwise) provided for projects or activities ; or 

(B) any other type of Executive action or inaction which 
effectively precludes the obligation or expenditure of budget 
authority, including authority to obligate by contract in ad- 
vance of appropriations as specifically authorized by law ; 

(2) "Comptroller General" means the Comptroller General of 
the United States ; 

(3) "rescission bill" means a bill or joint resolution which only 
rescinds, in whole or in part, budget authority proposed to be 
rescinded in a special message transmitted by the President under 
section 1012, and upon which the Congress completes action before 
the end of the first period of 45 calendar days of continuous session 
of the Congress after the date on which the President's message 
is received by the Congress ; 

(4) "impoundment resolution" means a resolution of the House 
of Representatives or the Senate which only expresses its disap- 
proval of a proposed deferral of budget authority set forth in a 
special message transmitted by the President under section 1013 ; 
and 

(5) continuity of a session of the Congress shall be considered 
as broken only by an adjournment of the Congress sine die, and 
the days on which either House is not in session because of an 
adjournment of more than 3 days to a day certain shall be excluded 
in the computation of the 45-day period referred to in paragraph 
(3) of this section and in section 1012, and the 25-day periods- 
referred to in sections 1016 and 1017(b) (1). If a special message 
is transmitted under section 1012 during any Congress and the 
last session of such Congress adjourns sine die before the expira- 
tion of 45 calendar days of continuous session (or a special mes- 
sage is so transmitted after the last session of the Congress 
adjourns sine die) , the message shall be deemed to have been re- 
transmitted on the first day of the succeeding Congress and the 
45-day period referred to in paragraph (3) of this section and in 
section 1012 (with respect to such message) shall commence on the 
day after such first day. 

RESCISSION OF BUDGET AUTHORITT 

Sec. 1012.^ (a) Transmittal of Special Message. — ^Whenever the 
President determines that all or part of any budget authority will not 

^Sec. 204(12) of the Fiscal Year Trangitlon Act. Public Law 94-272, 90 Stat 888, 
approved April 21, 1976, provides for treatment of the transition quarter period between 
July 1, 1976 through September 30, 1976, as part of a fiscal year beginning July 1, 1975. 

68 



BUDGET AND IMPOUNDMENT CONTROL ACT §1013 

be required to carry out the full objectives or scope of programs for 
which it is provided or that such budget authority should be rescinded 
for fiscal policy or other reasons (including the termination of author- 
ized projects or activities for which budget authority has been pro- 
vided), or whenever all or part of budget authority provided for only 
<one fiscal year is to be reserved from obligation for such fiscal year, 
the President shall transmit to both Houses of Congress a special mes- 
sage specifying — 

(1) the amount of budget authority which he proposes to bo 
rescinded or which is to be so reserved ; 

(2) any account, department, or establishment of the Govern- 
ment to which such budget authority is available for obligation, 
and the specific project or governmental functions involved; 

(3) the reasons why the budget authority should be rescinded 
or is to be so reserved ; 

(4) to the maximum extent practicable, the estimated fiscal, 
economic, and budgetary effect of the proposed rescission or of the 
reservation; and 

(5) all facts, circumstances, and considerations relating to or 
bearing upon the proposed rescission or the reservation and the 
decision to effect the proposed rescission or the reservation, and to 
the maximum extent practicable, the estimated effect of the pro- 
posed rescission or the reservation upon the objects, purposes, and 
programs for which the budget authority is provided. 

(b) Requirement to JMake Available for Obligation. — Any 
amount of budget authority proposed to be rescinded or that is to be 
reserved as set forth in such special message shall be made available for 
obligation unless, within the prescribed 45-day period, the Congress 
has completed action on a rescission bill rescinding all or part of the 
amount proposed to be rescinded or that is to be reserved. 

DISAPPROVAL OF PROPOSED DEFERRALS OF BUDGET AUTHORITY 

Sec. 1013.^ (a) TRANS]snTTAL of Special Message. — ^Whenever the 
President, the Director of the Office of Management and Budget, the 
head of any department or agency of the United States, or any officer 
or employee of the United States proposes to defer any budget author- 
ity provided for a specific purpose or project, the President shall 
transmit to the House of Eepresentatives and the Senate a special mes- 
sage specifying — 

( 1 ) the amount of the budget authority proposed to be deferred ; 

(2) any account, department, or establishment of the Govern- 
ment to which such budget authority is available for obligation, 
and the specific projects or governmental functions involved ; 

(3) the period of time during which the budget authority is 
proposed to be deferred ; 

(4) the reasons for the proposed deferral, including any legal 
authority invoked by him to justify the proposed deferral; 

(5) to the maximum extent practicable, the estimated fiscal, 
economic, and budgetary effect of the proposed deferral ; and 

(6) all facts, circumstances, and considerations relating to or 
bearing upon the proposed deferral and the decision to effect the 

»Sec. 204(12) of the Fiscal Year Transition Act, PubUc Law 94-272, 90 Stat. 383, 
approved April 21, 1976, provides for treatment of the transition quarter period between 
July 1, 1976 through September 30, 1976, as part of a fiscal year beginning July 1, 1975. 

69 



§1014 BUDGET AND IMPOUNDMENT CONTROL ACT 

proposed deferral, including an analysis of such facts, circum- 
stances, and considerations in terms of their application to any 
legal authority and specific elements of legal authority invoked 
by him to justify such proposed deferral, and to the maximum 
extent practicable, the estimated effect of the proposed deferral 
upon the objects, purposes, and programs for which the budget 
authority is provided. 
A special message may include one or more proposed deferrals of 
budget authority. A deferral may not be proposed for any period of 
time extending beyond the end of the fiscal year in which the special 
message proposing the deferral is transmitted to the House and the 
Senate. 

(b) Requirement To Make Available for Obligation. — Any 
amount of budget autho-rity proposed to be deferred, as set forth in a 
special message transmitted under subsection (a), shall be made avail- 
able for obligation if either House of Congress passes an impoundment 
resolution disapproving such proposed deferral. 

(c) Exception. — The provisions of this section do not apply to any 
budget authority proposed to be resomded or that is to be reserved as 
set forth in a special message required to be transmitted under section 
1012. 

transmission of messages; publication 

Sec. 1014. (a) Delivery to House and Senate. — Each special mes- 
sage transmitted under section 1012 or 1013 shall be transmitted to the 
House of Representatives and the Senate on the same day, and shall 
be delivered to the Clerk of the House of Representatives if the House 
is not in session, and to the Secretary of the Senate if the Senate is 
not in session. Each special message so transmitted shall be referred to 
the appropriate committee of the House of Representatives and the 
Senate. Each such message shall be printed as a document of each 
House. 

(b) Delivery to Comptroller General. — A copy of each special 
message transmitted under section 1012 or 1013 shall be transmitted to 
the Comptroller General on the same day it is transmitted to the House 
of Representatives and the Senate. In order to assist the Congress in 
the exercise of its functions under sections 1012 and 1018, the Comp- 
troller General shall review each such message and inform the House 
of Representatives and the Senate as promptly as practicable with 
respect to — 

(1) in the case of a special message transmitted under section 

1012, the facts surrounding the proposed rescission or the reserva- 
tion of budget authority (including the probable effects thereof) ; 
and 

(2) in the case of a special message transmitted under section 

1013, (A) the facts surrounding each proposed deferral of budget 
authority (including the probable effects thereof) and (B) 
whether or not (or to what extent), in his judgment, such pro- 
posed deferral is in accordance with existing statutory authority. 

(c) Transmission of Supplementary Messages, — If any informa- 
tion contained in a special message transmitted imder section 1012 or 
1013 is subsequently revised, the President shall transmit to both 
Houses of Congress and the Comptroller General a supplementary 
message stating and explaining such revision. Any such supplemen- 

70 



BUDGET AND IMPOUNDMENT CONTROL ACT §1015 

tary message shall be delivered, referred, and printed as provided in 
subsection (a). The Comptroller General shall promptly notify the 
House of Representatives and the Senate of any changes in the infor- 
mation submitted by him under subsection (b) which may be necessi- 
tated by such revision. 

(d) Printixg IX Federal Register. — Any special message trans- 
mitted under section 1012 or 1013, and any supplementary message 
transmitted under subsection (c), shall be printed in the first issue 
of the Federal Register published after such transmittal. 

(e) ^ Cumulatr-e Reports of Proposed Rescissions, Reservations, 
AND Deferrals of Budget Authority. — 

(1) The President shall submit a report to the House of Repre- 
sentatives and the Senate, not later than the 10th day of each 
month during a fiscal year, listing all budget authority for that 
fiscal year with respect to which, as of the first day of such 
month — 

(A) he has transmitted a special message under section 

1012 with respect to a proposed rescission or a reservation; 
and 

(B) he has transmitted a special message under section 

1013 proposing a deferral. 

Such report shall also contain, with respect to each such pro- 
posed rescission or deferral, or each such reservation, the infor- 
mation required to be submitted in the special message with 
respect thereto under section 1012 or 1013. 

(2) Each report submitted under paragraph (1) shall be 
printed in the first issue of the Federal Register published after 
its submission. 

reports by comptroller general 

Sec. 1015. (a) Failure To Til\nsmit Special Message. — If the 
Comptroller General finds that the President, the Director of the Office 
of Management and Budget, the head of any department or agency of 
the United States, or any other officer or employee of the United 
States — 

(1) is to establish a reserve or proposes to defer budget author- 
ity with respect to which the President is required to transmit a 
special message under section 1012 or 1013 ; or 

(2) has ordered, permitted, or approved the establishment of 
such a reserve or a deferral of budget authority ; 

and that the President has failed to transmit a special message with 
respect to such reserve or deferral, the Comptroller General shall 
make a report on such reserve or deferral and any available informa- 
tion concerning it to both Houses of Congress. The provisions of this 
part shall apply with respect to such reserve or deferral in the same 
manner and with the same effect as if such report of the Comptroller 
General were a special message transmitted by the President under 
section 1012 or 1013, and, for purposes of this part, such report shall 
be considered a special messii^e transmitted under section 1012 or 
1013. 



iSec. 204(12) of the Fiscal Tear Transition Act. Public Law 94-272. 90 Stat. 38.?, 
approved April 21, 1976, prorldes for treatment of the transition quarter between July 1, 
1976 through September 30,- 1976, as part of a fiscal year beginning July 1, 1975. 



71 



§ 1016 BUDGET AND IMPOUNDMENT CONTROL ACT 

(b) Incokrect Classification of Special Message. — If the Presi- 
dent has transmitted a special message to both Houses of Congress 
in accordance with section 1012 or 1013, and the Comptroller General 
believes that the President so transmitted the special message in 
accordance with one of those sections when the special message should 
have been transmitted in accordance with the other of those sections, 
the Comptroller General shall make a report to both Houses of the 
Congress setting forth his reasons. 

suits by comptroller general 

Sec. 1016. If, under section 1012(b) or 1013(b), budget authority is 
required to be made available for obligation and such budget authority 
is not made available for obligation, the Comptroller General is hereby 
exj)ressly empowered, through attorneys of his own selection, to bring 
a civil action in the United States District Court for the District of 
Columbia to require such budget authority to be made available for 
obligation, and such court is hereby expressly empowered to enter in 
such civil action, against any department, agency, officer, or employee 
of the United States, any decree, judgment, or order which may be 
necessary or appropriate to make such budget authority available for 
obligation. The courts shall give precedence to civil actions brought 
under this section, and to appeals and writs from decisions in such 
actions, over all other civil actions, appeals, and writs. No civil action 
shall be brought by the Comptroller General under this section until 
the expiration of 25 calendar days of continuous session of the Con- 
gress following the date on which an explanatory statement by the 
Comptroller General of the circumstances giving rise to the action 
contemplated has been filed with the Speaker of the House of Kepre- 
sentatives and the President of the Senate. 

procedure in house and senate 

Sec. 1017. (a) Referral. — Any rescission bill introduced with 
respect to a special message or impoundment resolution introduced 
with respect to a proposed deferral of budget authority shall be 
referred to the appropriate committee of the House of Representatives 
or the Senate, as the case may be. 

(b) Discharge OF Committee. — 

(1) If the committee to which a rescission bill or impoundment 
resolution has been referred has not reported it at the end of 25 
calendar days of continuous session of the Congress after its intro- 
duction, it is in order to move either to discharge the committee 
from further consideration of the bill or resolution or to discharge 
the committee from further consideration of any other rescission 
bill with respect to the same special message or impoundment 
resolution with respect to the same proposed deferral, as the case 
may be, which has been referred to the committee. 

(2) A motion to discharge may be made only by an individual 
favoring the bill or resolution, may be made only if supported by 
one-fifth of the Members of the House involved (a quorum being 
present), and is highly privileged in the House and privileged in 
the Senate (except that it may not be made after the committee 
has reported a bill or resolution with respect to the same special 



72 



BUDGET AND IMPOUNDMENT CONTROL ACT §1017 

message or the same proposed deferral, as the case may be) ; and 
debate thereon shall be limited to not more than 1 hour, the time 
to be divided in the House equally between those favoring and 
those opposing the bill or resolution, and to be divided in the 
Senate equally between, and controlled by, the majority leader 
and the minority leader or their designees. An amendment to the 
motion is not in order, and it is not in order to move to reconsider 
the vote by which the motion is agreed to or disagreed to, 
(c) Floor CoxsroERAxiox ix the House. — 

(1) When the committee of the House of Kepresentatives has 
reported, or has been discharged from further consideration of a 
rescission bill or impoundment resolution, it shall at any time 
thereafter be in order (even though a previous motion to the same 
effect has been disagreed to) to move to proceed to the considera- 
tion of the bill or resolution. The motion shall be highly privileged 
and not debatable. An amendment to the motion shall not be in 
order, nor shall it be in order to move to reconsider the vote by 
which the motion is agreed to or disagreed to. 

(2) Debate on a rescission bill or impoundment resolution shall 
be limited to not more than 2 hours, which shall be divided 
equally between those favoring and those opposing the bill or 
resolution. A motion further to limit debate shall not be debatable. 
In the case of an impounchnent resolution, no amendment to, or 
motion to recommit, the resolution shall be in order. It shall not 
be in order to move to reconsider the vote by which a rescission bill 
or impoundment resolution is agreed to or disagreed to. 

(3) Motions to postpone, made with respect to the considera- 
tion of a rescission bill or impoundment resolution, and motions 
to proceed to the consideration of other business, shall be decided 
without debate. 

(4) All appeals from the decisions of the Chair relating to 
the application of the Rules of the House of Representatives to 
the procedure relating to any rescission bill or impoundment res- 
olution shall be decided without debate. 

(5) Except to the extent specifically provided in the preceding 
provisions of this subsection, consideration of any rescission bill 
or impoundment resolution and amendments thereto (or any con- 
ference report thereon) shall be governed by the Rules of the 
House of Representatives applicable to other bills and resolutions, 
amendments, and conference reports in similar circumstances. 

(d) Floor Coxsideratiox ix the Sexate. — 

(1) Debate in the Senate on any rescission bill or impoundment 
resolution, and all amendments thereto (in the case of a rescission 
bill) and debatable motions and appeals in connection therewith, 
shall be limited to not more than 10 hours. The time shall be 
equally divided between, and controlled by, the majority leader 
and the minority leader or their designees. 

(2) Debate in the Senate on any amendment to a rescission bill 
shall be limited to 2 hours, to be equally divided between, and con- 
trolled by, the mover and the manager of the bill. Debate on any 
amendment to an amendment, to such a bill, and debate on any- 
debatable motion or appeal in connection with such a bill or an 
impoundment resolution shall be limited to 1 hour, to be equally 
divided between, and controlled by, the mover and the manager of 

73 



§1017 BUDGET AND IMPOUNDMENT CONTROL ACT 

the bill or resolution, except that in the event the manager of the 
bill or resolution is in favor of any such amendment, motion, or 
appeal, the time in opposition thereto, shall be controlled by the 
minority leader or his designee. No amendment that is not germane 
to the provisions of a rescission bill shall be received. Such leaders, 
or either of them, may, from the time under their control on the 
passage of a rescission bill or impoundment resolution, allot addi- 
tional time to any Senator during the consideration of any amend- 
ment, debatable motion, or appeal. 

(3) A motion to further limit debate is not debatable. In the 
case of a rescission bill, a motion to recommit (except a motion to 
recommit with instructions to report back within a specified num- 
ber of days, not to exceed 3, not counting any day on which the 
Senate is not in session) is not in order. Debate on any such motion 
to recommit shall be limited to one hour, to be equally divided 
between, and controlled by, the mover and the manager of the 
concurrent resolution. In the case of an impoundment resolution, 
no amendment or motion to recommit is in order. 

(4) The conference report on any rescission bill shall be in 
order in the Senate at any time after the third day (excluding Sat- 
urdays, Sundays, and legal holidays) following the day on which 
such a conference report is reported and is available to Members 
of the Senate. A motion to proceed to the consideration of the con- 
ference report may be made even though a previous motion to the 
same effect has been disagreed to. 

(5) During the consideration in the Senate of the conference 
report on any rescission bill, debate shall be limited to 2 hours, to 
be equally divided between, and controlled by, the majority leader 
and minority leader or their designees. Debate on any debatable 
motion or appeal related to the conference report shall be limited 
to 30 minutes, to be equally divided between, and controlled by 
the mover and the manager of the conference report. 

(6) Should the conference report be defeated, debate on any 
request for a new conference and the apponitment of conferees 
shall be limited to one hour, to be equally divided between, and 
controlled by, the manager of the conference report and the minor- 
ity leader or his designee, and should any motion be made to 
instruct the conferees before the conferees are named, debate on 
such motion shall be limited to 30 minutes, to be equally divided 
between, and controlled by, the mover and the manager of the 
conference report. Debate on any amendment to any such instruc- 
tions shall be limited to 20 minutes to be equally divided between, 
and controlled by, the mover and the manager of the conference 
report. In all cases when the manager of the conference reports is 
in favor of any motion, appeal, or amendment, the time in opposi- 
tion shall be under the control of the minority leader or his 
designee. 

(7) In any case in which there are amendments in disagree- 
ment, time on each amendment shall be limited to 30 minutes, to be 
equally divided between, and controlled by, the manager of the 
conference report and the minority leader or his designee. No 
amendment that is not germane to the provisions of such amend- 
ments shall be received. 

Approved July 12, 1974. 

74 



§3 

JOINT FUNDING SIMPLIFICATION ACT OF 1974 

[Public Law 93-510, 88 Stat. 1605] 

AN ACT To provide authority to expedite procedures for consideration and ap- 
proval of projects drawing upon more than one Federal assistance program, to 
simplify requirements for operation of those projects, and for other purposes. 

Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled^ That this Act may 
be cited as the ''Joint Funding Simplification Act of 1974". 

PURPOSE 

Sec. 2. The purpose of this Act is to enable State and local govern- 
ments and private, nonprofit organizations to use Federal assistance 
more effectively and efficiently, and to adapt that assistance more 
readily to their particular needs through the wider use of projects 
drawing upon resources available from more than one Federal agency, 
program, or appropriation. It is the further purpose of this Act to 
encourage Federal-State arrangements under which local governments 
and private, nonprofit organizations may more effectively and effi- 
ciently combine State and Federal resources in support of projects 
of common interest to the governments and organizations concerned, 

BASIC RESPONSIBILITIES OF THE PRESIDENT AND HEADS OF FEDERAL 

AGENCIES 

Sec. 3. (a) The President shall promulgate such regulations as may 
be necessary or appropriate to assure that this Act is applied by all 
Federal agencies in a consistent manner and in accordance with its 
purposes. He may, for this purpose, require that Federal agencies 
adopt or prescribe procedures that will assure that applicants for 
assistance to projects funded pursuant to the provisions of this Act 
make appropriate efforts (1) to secure the views and recommendations 
of non-Federal agencies that may be significantly affected by such 
projects, and (2) to resolve questions of common interest to those 
agencies prior to submission of any application. 

(b) Subject to such regulations as the President may prescribe, 
and to other applicable law, the heads of Federal agencies, by internal 
agency order or interagency agreement, may take the following 
actions : 

(1) Identification of related programs likely to be particularly 
suitable or appropriate for providing joint support for specific 
kinds of projects thereimder. 

(2) Development and promulgation of guidelines, model or 
illustrative projects, joint or common application forms, and other 
material or guidance to assist in the planning and development of 
projects drawing support from different programs. 



75 



1 4 JOINT FUNDING SIMPLIFICATION ACT 

(3) Eeview of administratively established program require- 
ments in order to determine which of those requirements may 
impede joint support of projects thereunder and the extent to 
which such requirements may be modified, making such modifica- 
tions where appropriate. 

(4) Establishment of common technical or administrative rules 
with respect to related programs to assist in the joint use of funds 
in the support of specific projects or classes of projects under 
such programs. 

(5) Creation of joint or common application processing and 
project supervision procedures or mechanisms including proce- 
dures for designating lead agencies to assume responsibilities for 
processing applications on behalf of several agencies and for 
designation of managing agencies to assume responsibilities 
for project supervision on behalf of several agencies. 

(c) The head of each Federal agency shall be responsible for taking 
actions, to the maximum extent permitted under applicable law, that 
will further the purpose of this Act with respect to Federal assistance- 
programs administered by his agency. Each Federal agency head 
shall also consult and cooperate with the heads of other Federal agen-^ 
cies in order similarly to promote the purposes of this Act with respect, 
to Federal assistance programs of different agencies that may be used 
jointly in support of projects undertaken by State or local govern- 
ments, or private, nonprofit organizations. 

APPLICATION PROCESSING 

Sec. 4. Actions taken by Federal agency heads pursuant to this Act 
that relate to the processing of applications or requests for assistance 
under two or more Federal programs in support of any project 
shall be designed to assure, so far as reasonably possible, that (1) all 
required reviews and approvals are handled expeditiously; (2) full 
account is taken of any special considerations of timing that are made 
known by the applicant that would affect the feasibility of a jointly 
funded project; (3) the applicant is required to deal with a minimum- 
number of Federal representatives, acting separately or as a common 
board or panel; (4) the applicant is promptly informed of decisions 
with respect to an application and of any special problems or impedi- 
ments that may affect the feasibility of Federal provision of assistance 
on a joint basis; and (5) the applicant is not required by representa- 
tives of any one Federal agency or program to obtain information or 
assurances concerning the requirements or actions of another Federal 
agency that could more appropriately be secured through direct com- 
munciation among the Federal agencies involved. 

SPECIAL AUTHORITIES ^BASIC CONDITIONS 

Sec. 5. Where appropriate to further the purposes of this Act, and 
subject to the conditions prescribed in this section, heads of Federal 
agencies may use the authorities described in sections 6, 7, and 8" 
(relating to the establishment of uniform technical or administrative 
requirements, delegation of powers and responsibilities, and estab- 
lishment of joint management funds) with respect to projects assisted 
under more than one Federal assistance program. These authorities; 



76 



JOINT FUNDING SIMPLIFICATION ACT §7' 

shall be exercised only pursuant to regulations prescribed by the Presi- 
dent. Those regulations shall include criteria or procedures to assure 
that the authorities are limited in use to problems that cannot be 
adequately dealt with through other actioris pursuant to this Act or 
other applicalble law, that they are applied only as necessary to promote 
expeditious processing of applications or effective and efficient admin- 
istration of projects, and that they are applied in a manner consistent 
with the protection of the Federal interest and with program purposes, 
and statutory requirements. 

ESTABLISHMENT OF "DTSTIFORM TECHNICAL OR ADMINISTRATIVE 
REQUIREMENTS 

Sec. 6. (a) In order to provide for projects that would otherwise^ 
be subject to varying or conflicting technical or administrative rules 
and procedures not required by law, the heads of Federal agencies 
may adopt uniform provisions with respect to — 

(1) inconsistent or conflicting requirements relating to financial 
administration of such projects, including accounting, reporting 
and auditing, and maintaining separate bank accounts, but only 
to the extent consistent with the requirements of section 8; 

(2) inconsistent or conflicting requirements relating to the 
timing of Federal payments for such projects where a single or 
combined schedule is to be established for the project as a whole; 

(3) inconsistent or conflicting requirements that assistance be 
extended in the form of a grant rather than a contract, or a 
contract rather than a grant ; and 

(4) inconsistent or conflicting requirements relating to account- 
ability for, or the disposition of, records, property, or structures 
acquired or constructed with Federal assistance where common 
rules are established for the project as a whole. 

(b) In order to permit processing of applications in accordance with 
the purposes of this Act, Federal agency heads may provide for review 
of proposals for projects by a single panel, board, or committee in lieu 
of review by separate panels, boards, or committees except when such 
review is specifically required by law. 

(c) In promoting the more effective and efficient use of Federal 
assistance resources. Federal agency heads may waive requirements 
that a single or specific public agency be utilized or designated to 
receive, supervise, or otherwise administer a part of the Federal assist- 
ance drawn upon by any jointly funded project to the extent that 
administration by another public agency is determined to be fully con- 
sistent with applicable State or local law and with the objectives of 
the Federal assistance program involved. This authority may be exer- 
cised only (1) upon request of the head of a unit of general govern- 
ment, with respect to agencies that he certifies to be under his 
jurisdiction, or (2) with the agreement of the several State or local 
public agencies concerned. 

delegation of powers 

Sec. 7. With the approval of the President, agency heads may dele- 
gate to other Federal agencies powers and functions relating to the 
supervision or administration of Federal assistance, or otherwise 



77 



§8 JOIN*r FUNDING SIMPLIFICATION ACT 

aiTange for other agencies to perform such activities, with respect to 
projects or classes of projects funded under the terms of this Act. 
Delegations under this section shall be made only on such conditions 
as may be appropriate to assure that the powers and functions dele- 
gated are exercised in full conformity with applicable statutory pro- 
visions and policies, and shall not relieve agency heads of responsibility 
for the proper and efficient management of projects funded by their 
agencies. 

FUNDING ARRANGEMENTS AND PROCEDURES 

Sec. 8. (a) In order to provide for the more effective administration 
of funds drawn from more than one Federal program or appropriation 
in support of projects under this Act, there may be established joint 
management funds with respect to such projects. There shall be trans- 
ferred to the joint management fund from each affected program or 
appropriation, from time to time, its proportionate share of amounts 
needed for payment to the grantee. Any unexpended amounts shall be 
returned to the joint management fund by the grantee at the comple- 
tion of the project. 

(b) Any account in a joint mangagement fund shall be subject to 
such agreements, not inconsistent with this section and other appli- 
cable law, as may be entered into by the Federal agencies concerned 
with respect to the discharge of the responsibilities of those agencies 
and shall assure the availability of necessary information to those 
agencies and to the Congress. These agreements shall also provide that 
the agency administering a joint management fund shall be respon- 
sible and accountable by program and appropriation for the amounts 
provided for the purposes of each account established in the fund ; and 
shall include procedures for determining, from time to time, whether 
amounts in the account are in excess of the amounts required, and for 
returning that excess to the participating Federal agencies according 
to the applicable appropriations, subject to fiscal year limitations. 
Excess amounts applicable to expired appropriations will be lapsed 
from that fund. 

(c) For each project financed through an account in a joint man- 
agement fund established pursuant to this section, the recipients of 
moneys drawn from the fund shall keep such records as the head of 
the Federal agency responsible for administering the fund will pre- 
scribe. Such records shall, as a minimum, fully disclose the amount and 
disposition by such recipient of Federal assistance received under each 
program and appropriation, the total cost of the project in connection 
with which such Federal assistance was given or used, the amount of 
that portion of the cost of the project supplied by other sources, and 
such other records as will facilitate an effective audit. 

(d) The head of the Federal agency responsible for administering 
such joint management fund and the Comptroller General, of the 
United States or any of their duly authorized representatives, shall- 
have access for the purpose of audit and examination to smj books, 
documents, papers, and records of such recipients that are pertinent to 
the moneys received from such fund. 

(e) In the case of any project covered in a joint management fund, 
a single non-Federal share may be established according to the Federal 
share ratios applicable to the several Federal assistance programs 



78 



JOINT FUNDING SIMPLIFICATION ACT §12 

involved and the proportion of funds transferred to the project 
iiccount from each of those programs. 

AUXILIARY KIOVISIONS 

Sec. 9. Appropriations available to any Federal assistance program 
for technical assistance or the training of personnel may be made 
available for the provision of technical assistance and training in 
connection with projects proposed or approved for joint funding 
involving that program and any other Federal assistance program. 

FEDERAL-STATE ASSISTANCE AXD AGREEMENTS 

Sec. 10. Subject to such regulations as the President may prescribe, 
Federal agencies may enter into agreements with States as appropriate 
to extend the benefits of this Act to projects involving assistance from 
one or more Federal agencies and one or more State agencies. These 
agreements may include arrangements for the processing of requests 
for, or the administration of, assistance to such projects on a joint 
basis. 

REPORTING 

Sec. 11. At least one year prior to the expiration of this Act, the 
President shall submit a comprehensive report to the Congress on 
actions taken under this Act, and make recommendations for its con- 
tinuation, modification, or termination. The report shall provide a 
detailed evaluation of the functioning of this Act, including informa- 
tion regarding tlie benefits and costs of jointly funded projects accru- 
ing to the participating State and local governments and private, 
nonprofit organizations, and to the Federal Government. 

DEFINITIONS 

Sec. 12. As used in this Act — 

(1) the term "Federal assistance programs" means programs 
that provide assistance through grant or contractual arrange- 
ments, but does not include assistance in the form of revenue 
sharing, loans, loan guarantees, or insurance; 

(2) the term "applicant" means any State or local government 
or private, nonprofit organization acting separately or together 
in seeking assistance with respect to a single project; 

(3) the term "project" means any undertaking, whether of a 
temporary or continuing nature that includes components pro- 
posed or approved for assistance under more than one Federal 
program, or one or more Federal and one or more State programs, 
if each of those components contributes materially to the accom- 
plishment of a single purpose or closely related purposes; 

(4) the term "Federal agency" means any agency, department, 
corporation, independent establishment, or other entity of the 
executive branch of the Government of the United States; 

(5) the term "State" means any of the several States of the 
United States, the District of Columbia, the Commonwealth of 
Puerto Rico, any territory or possession of the United States, 
or any agency or instrumentality of a State, and any tribe as 
defined in section 3(c) of the Indian Financing Act (88 Stat. 77) ; 



79 



§13 JOINT FUNDING SIMPLIFICATION ACT 

(6) the term "local government" means a local imit ot govern^ 
ment including a city, county, parish, town, township, village^ 
school district, council of governments, or other agency or instru- 
mentality of a local unit of government. 

EFFECTIVE DATE AND EXPIRATION 

Sec. 13. This Act shall become effective sixty days following the 
date of enactment, and shall expire five years following the date upon 
which it becomes effective ; except that the expiration of this Act shall 
not affect the status of any project approved prior to the date of such 
expiration. 

Approved December 5, 1974. 



80 



APPROPRIATIONS ACTS 

EXCERPTS FROM DEPARTMENT OF HOUSING AND 
URBAN DEVELOPMENT— INDEPENDENT AGENCIES 
APPROPRIATION ACT, 1978 

[Public Law 95-119, 91 Stat. 1073] 

AN ACT making appropriations for the Department of Housing and Urban De- 
velopment, and for sundry independent executive agencies, boards, bureaus, 
commissions, corporations, and offices for the fiscal year ending September 30,. 
1978, and for other purposes. 

:3t * * ie i: * 1 

TITLE I— DEPARTMENT OF HOUSING AND UPvBAN: 
DEVELOPMENT 

Housing Programs 

annual contribu'nons for assisit.d housing 

The ainoiuit of contracts for annual contributions, not otherwise 
provided for. as authorized by section 5 of the United States Housing- 
Act of 1937. as amended (42'l^.S.C. 143Tc). and heretofore approved 
in annual appropriations acts, is increase<l by $1,150,995,000 of whicli 
not more than $42,500,000 shall be for the modernization of existing 
low-income housinof projects: Pravided^ That budget authority obli- 
gated under such contracts shall be increased above amounts heretofore 
provided in annual appropriations acts by $31,483,563,000: Provided 
further^ That of the total herein provided, excluding funds for mod- 
ernization, not less than $206,250,000 shall be used only for contracts 
for annual contributions to assist in financing the development or ac- 
quisition of low-income housing projects to be owned by public housing 
agencies and shall not be used for projects on which construction or 
substantial rehabilitation is commenced after the effective date of this 
Act, except in the case of amendments to existing contracts: Provided 
further. That of the amount set forth in the second proviso, not less 
than 15 per centum shall be used only with respect to new construction 
in non-metropolitan areas: Prcxcided further, That not more than 
$82,00().0()0 shall be used only for contracts in excess of 30 years with 
State housing finance or development agencies as defined in section 
802(b) (2) (A) of the Housing and Community Development Act of 
1974 : Provided further. That any balances of authorities remaining 
at the end of fiscal year 1977 shall be added to and merged with the 
authority provided herein and made subject only to terms and con- 
ditions of law applicable to authorizations becoming available in fiscal 
year 1978 except that unutilized balances of set-asides contained in 
previous appropriation^ acts to assist in financing the development of 
or acquisition of low-income housing projects to be owned by public- 



81 



APPROPRIATIONS ACTS 

housing agencies other than under section 8 of the above Act shall re- 
main in effect during fiscal year 1978. 

HOUSING FOR THE ELDERLY OR HANDICAPPED 

The limitation on the aggregate loans that may be made under 
section 202 of the Housing Act of 1959, as amended, from the fund 
authorized by subsection (a) (4) of such section, is hereby established 
for the fiscal year 1978 at $750,000,000 in accordance with paragraph 
(C) of such subsection, which funds shall be available only to qualified 
nonprofit sponsors for the purpose of providing 100 per centum loans 
for the development of housing for the elderly or handicapped, with 
any cash equity of other financial commitments imposed as a condition 
of loan approval to be returned to the sponsor if sustaining occupancy 
is achieved in a reasonable period of time: Provided^ That the full 
amount shall be available for permanent financing (including con- 
struction financing) for housing projects for the elderly or handi- 
capped : Provided further^ That the Secretary may borrow from the 
Secretary of the Treasury in such amounts as are necessary to provide 
the loans authorized herein : Provided fv/rther^ That, not withstanding 
any other provision of law, the receipts and disbursements of the 
aforesaid fund shall be included in the totals of the Budget of the 
United States Government. 

HOUSING PAYMENTS 

For the payment of annual contributions, not otherwise provided 
for, in accordance with section 5 of the United States Housing Act of 
1937, as amended (42 U.S.C. 1437c) ; for payments authorized by 
title IV of the Housing Act of 1950, as amended (12 U.S.C. 1749 et 
seq.) ; for rent supplement payments authorized by section 101 of the 
Housing and Urban Development Act of 1965, as amended (12 U.S.C. 
1701s) ; for payments as authorized by sections 235 and 236, of the 
ISTational Housing Act, as amended (12 U.S.C. 17l5z, 1715z-l) ; and 
for payments as authorized by section 802 of the Housing and Com- 
munity Development Act of 1974 (88 Stat. 633), $4,382,000,000: 
Provided, That excess rental charges credited to the Secretary in 
accordance with section 236(g) of the National Housing Act, as 
amended, shall be available, in addition to amounts appropriated 
herein, for the payments on contracts entered into pursuant to the 
authorities enumerated above. 

PAYMENTS FOR OPERATION OF L0W-INC0]ME HOUSING PROJECTS 

For payments to public housing agencies for operating subsidies for 
low-income housing projects as authorized by section 9 of the United ! 
States Housing Act of 1937, as amended (42 U.S.C. 1437g), i 
$685,000,000. ^ ^^ 

FEDERAL HOUSING ADMINISTRATION FUND 

For reimbursement to the Federal Housing Administration Funds 
for losses incurred under the urban homesteading program (12 U.S.C. 
1706e), $15,000,000, to remain available until expended. 



82 



APPROPKIATIONS ACTS 
COLLEGE HOUSING LOANS AND OTHER EXPENSES 

The aggregate amount of commitments for loans made from the 
fmid established pursuant to title IV of the Housing Act of 1950, as 
amended (12 U.S.C. 1749), for the fiscal year 1978 shall not exceed 
the total of loan repayments and other income available during such 
period, less operating costs. 

Govern:m3int National Mortgage Association 

SPECIAL assistance FUNCTIONS 

The aggregate amount of purchases and commitments authorized 
to be made pursuant to section 305 of the National Housing Act, as 
amended, out of recaptured Special Assistance Purchase authority 
may not exceed $2,000,000,000. 

payment of participation sales INSUFFICIENCIES 

For the payment of such insufficiencies as may be required by the 
Government National Mortgage Association, as trustee, on account of 
outstanding beneficial interests or participations in assets of the De- 
partment of Housing and Urban Development (including the Govern- 
ment National Mortgage Association) authorized by the Independent 
Offices and Department of Housing and Urban Development Appro- 
priation Act, 1968, to be issued pursuant to section 302(c) of the 
Federal National Mortgage Association Charter Act, as amended, 
$16,587,000. 

Communitt Planning and De\txopment 
coMMUNirr development grants 

For grants to States and units of general local government and for 
related expenses, not otherwise provided for, necessary for carrying 
out a community development grant progi'am as authorized by title I 
of the Housing and CommunityDevelopment Act of 1974, as amended 
(42 U.S.C. chapter 69), $3,500,000,000, to remain available until Sep- 
tember 30, 1980. 

For grants to units of general local government pursuant to section 
103(b) of title I of the Housing and Com.munity Development Act of 
1974, as amended, $100,000,000, to remain available until September 30, 
1980. 

URBAN DEVELOPMENT ACTION GRANTS 

For allocations and grants pursuant to section 103(c) of title I of 
the Housing and Community Development Act of 1974, as amended, 
$400,000,000, to remain available until September 30, 1980. 

COMPREHENSIVE PLANNING GRANTS 

For comprehensive planning grants as authorized by section 701 of 
the Housing Act of 1954, as amended (40 U.S.C. 461), $57,000,000, to 
remain available until expended. 



83 



APPROPRIATIONS ACTS 
REHABILITATION LOAN FUND 

The aggregate amount of commitments for loans made from the 
fund for fiscal year 1978 shall not exceed the total of loan repayments 
and other income available during such period, less operating costs, 
which aggregate shall be augmented by anjr previously appropriated 
funds which would otherwise become unavailable after September 30, 

1977. 

Federal Insurance Administeiation 

FLOOD insurance 

For necessary expenses, not otherwise provided for in carrying out 
the National Flood Insurance Act of 1968, as amended (42 U.S.C. 
chap. 50), $91,000,000. 

Neighborhoods, Voluntary Associations and Consumer 

Protection 

housing counseling assistance 

For contracts, grants, and other assistance, not otherwise provided 
for, of providing counseling and advice to tenants and homeowners — 
both current and prospective — with respect to property maintenance, 
financial management, and such other matters as may be appropriate 
to assist them in improving their housing conditions and meeting the 
responsibilities of tenancy or homeownership, including provisions 
for training and for support of voluntary agencies and services as 
authorized by section 106(a) (1) (iii) and section 106(a)(2) of the 
Housing and Urban Development Act of 1968, as amended, $5,000,000. 

Policy Development and Research 

research and technology 

For contracts, grants, and necessary expenses of programs of 
research and studies relating to housing and urban problems, not 
otherwise provided for, as authorized by title V of the Housing and 
Urban Development Act of 1970, as amended (12 U.S.C. I701z-1 et 
seq.), including carrying out the functions of the Secretary under 
section 1(a) (1) (i) of Reorganization Plan No. 2 of 1968, $52,000,000, 
to remain available until September 30, 1979. 

Management and Administration 

SALARIES and EXPENSES, DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT (INCLUDING TRANSFER OF FUNDS) 

For necessary administrative and nonadministrative expenses of 
the Department of Housing and Urban Development, not otherwise 
provided for, including not to exceed $2,500 for official reception and 
representation expenses, $462,494,000 of which $229,000,000 shall 
be provided from the various funds of the Federal Housing 
Administration. 



84 



APPROPRUTIONS ACTS 

FUNDS APPKOPRIATED TO THE PRESIDENT 
Federal Disaster Assistance Admikistration 

DISASTER relief 

For expenses necessary to carry out the functions of the Department 
of Housing and Urban Development under the Disaster Relief Act 
of 1970, as amended, the Disaster Relief Act of 1974, and Reorganiza- 
tion Plan Xo. 1 of 1973, authorizing assistance to States and local 
goveiTiments, $150,000,000, to remain available until expended: Pro- 
dded^ That not to exceed o per centum of the foregoing amount shall 
be available for administrative expenses. 

TITLE II— INDEPENDENT AGENCIES 

4e » * * * ♦ * 

National Institute of Building Sciences 

SAL.VRIES and expenses 

For nccessar\^ expenses of the National Institute of Building 
Sciences as authorized by Section 809 of the Housing and Community 
Development Act of 1974, as amended (12 U.S.C. 170 lj-2), $1,000,000. 

* * * * * * * 

Veterans Administration 
**♦♦♦♦♦ 

LOAN guaranty REVOLMNG FUND 

During tlie current fiscal year, the Loan guaranty revolvmg fund 
>hall be available for expenses, but not to exceed $575,000,000, for 
property acquisitions, payment of participation sales insufficiencies, 
and other loan guaranty and insurance operations under chapter 37, 
title 38, United States Code, except administrative expenses, as author- 
ized by section 1824 of such title: Provided, That the unobligated 
balances including retained earnings of the Direct loan revolving fund 
shall be available, during the current fiscal year, for transfer to the 
Loan guaranty revolving fund in such amounts as may be necessary 
to provide for the timely payment of obligations of such fund and the 
Administrator of Veterans Affairs shall not be required to pay interest 
en amounts so transfen-ed after the time of such transfer. 

* * * ♦ * 4t * 

administrative provisions 

Not to exceed 5 per centum of any appropriation for the current 
fiscal year for ''Compensation and pensions'', ''Readjustment benefits", 
and ''Veterans insurance and indemnities'- may be transferred to any 
otlier of the mentioned appropriations, but not to exceed 10 per centum 
of the appropriations so augmented. 

Appropriations available to the Veterans Administration for the 
current fiscal year for salaries and expenses shall he available for 
services as authorized by 5 U.S.C. 3109. 



85 



APPROPRIATIONS ACTS 

No part of the appropriations in this Act for the Veterans Admin- 
istration (except the appropriations for "Construction, major proj- 
ects" and "Construction, minor projects") shall be available for the 
purchase of any site for or toward the construction of any new hospital 

or home. 

♦ ♦ * * * » ♦ 

TITLE III— CORPOEATIONS 

Corporations and agencies of the Department of Housing and Urban 
Development and the Federal Home Loan Bank Board which are 
subject to the Government Corporation Control Act, as amended^ 
are hereby authorized to make such expenditures, within the limits 
of funds and borrowing authority available to each such corporation 
or agency and in accord with law, and to make such contracts and 
commitments without regard to fiscal year limitations as provided by 
section 104 of the Act as may be necessary in carrying out the pro- 
grams set forth in the budget for the current fiscal year for such cor- 
portation or agency except as hereinafter provided: Provided^ That 
collections of these corporations and agencies may be used for new 
loan or mortgage purchase commitments only to the extent expressly 
provided for in this Act (unless such loans are in support of other 
forms of assistance provided for in this or prior appropriation Acts) , 
except that this proviso shall not apply to the mortgage insurance 
or guaranty operations of these corporations, or where loans or mort- 
gage purchases are necessary to protect the financial interest of the 
United States Government. 

Federal Hgjme Loan Bank Board 

limitation on administrative and non administrative expenses, 
federal home loan bank board 

Not to exceed a total of $16,730,000 shall be available for administra- 
tive expenses of the Federal Home Loan Bank Board, which may 
procure services as authorized by 5 U.S.C. 3109, and contracts for such 
services with one organization mav be renewed annuallv, and uniforms 
or allowances therefor in accordance with law (5 U.S.C. 5901-5902), 
and said amount shall be derived from funds available to the Federal 
Home Loan Bank Board, including those in the Federal Home Loan 
Bank Board revolving fund and receipts of the Board for the current 
fiscal year and prior fiscal years, and ih^ Board may utilize and may 
make payment for services and facilities of the Federal home loaii 
banks, the Federal Reserve banks, the Federal Savings and Loan 
Insurance Corporation, the Federal Home Loan Mortgage Corpora- 
tion, and other agencies of the Government (including payment for" 
office space) : Provided, That all necessary expenses in connection with 
the conservatorship or liquidation of institutions insured by the 
federal feavings and Loan Insurance Corporation, liquidation or 
handling of assets of or derived fi^om such insured institutions, pay- 
ment of msiirance, and a<;tion for or toward the avoidance, termination, 
«nfW^??'^i''?- ^^^^ss^!.i^ t^e case of such insured institutions, or 
^i^il i.f^^I-''^^^ix^H^^^ ^^^(^) of the Federal Home L^an 

^9 m tuCt''''' 'S^^^^ *^ ^^r ^^^^' ^^^ A^t of 1933, section 
12 (1) of the Securities Exchange Act of 1934, or section 406 (c) , 407, or 

86 



APPROPRIATIONS ACTS 

i08 of the National Housing Act and all necessary expenses (including 
services performed on a contract or fee basis, but not including other 
personal services) in connection with the handling, including the 
purchase, sale, and exchange, of securities on behalf of Federal home 
loan banks, and the sale, issuance, and retirement of, or payment of 
interest on, debentures or bonds, under the Federal Home Loan Bank 
^ct, as amended, shall be considered as nonadministrative expenses for 
:he purposes hereof : Provided further. That members and alternates 
Df the Federal Savings and Loan Advisory Council shall be entitled to 
reimbursement from the Board as approved by the Board for trans- 
portation expenses incurred in attendance at meetings of or concerned 
^ith the work of such Council and may be paid in lieu of subsistence 
oer diem not to exceed the dollar amount set forth in 5 U.S.C. 5703 : 
Provided further^ That expenses of any functions of supervision 
(except of Federal home loan banks) vested in or exercisable by the 
Board shall be considered as nonadministrative expenses: Provided 
urther^ That not to exceed $1,000 shall be available for official recep- 
ion and representation expenses: Provided further^ That notwith- 
itanding any other provisions of this Act, except for the limitation 
n amount hereinbefore specified, the administrative expenses and 
)ther obligations of the Board shall be incurred, allowed, and paid 
n accordance with the pro\dsions of the Federal Home Loan Bank 
^ct of July 22, 1932, as amended (12 U.S.C. 1421-1449) : Provided 
^urther^ That the nonadministrative expenses (except such part as 
he Board determines not to be field expense, which part shall be 
;reated as if expenses of supervision and examination were not as such 
xcluded from administrative expense, and except those included in 
he first proviso hereof) for the supervision and examination of 
^I'ederal and State chartered institutions (other than special exam- 
nations determined by the Board to be necessary) shall not exceed 
)26,230,000. 

j:MTrATI0N ON AD^nNISTRATI\TE EXPENSES, FEDERAL SAVINGS AND LOAN 
INSTJRANCE CORPORATION 

Not to exceed $870,000 shall be available for administrative expenses, 
vhich shall be on an accrual basis and shall be exclusive of interest 
)aid, depreciation, properly capitalized expenditures, expenses in 
onnection with liquidation of insured institutions or activities relating 
o section 406(c), 407, or 408 of the National Housing Act, liquidation 
•r handling of assets of or derived from insured institutions, payment 
>f insurance, and action for or toward the avoidance, termination, or 
ninimizing of losses in the case of insured institutions, legal fees and 
xpenses and payments for expenses of the Federal Home Loan Bank 
Board determined by said Board to be properly allocable to said 
>rporation, and said Corporation mav utilize and may make pay- 
lents for services and facilities of the Federal home loan banks, the 
i^ed oral Keserve Banks, the Federal Home Loan Bank Board, the 
federal Home Loan Mortgage Corporation, and other agencies of the 
lOA-ernment : Provided, That notwithstanding any other provisions 
'f this Act, except for the limitation in amount hereinbefore specified, 
he fidministrative expenses and other obligations of said Corporation 
hall be incurred, allowed, and paid in accordance with title IV of the 
let of June 27, 1934, as amended ( 12 U.S.C. 1724-1 730f) . 

87 



g^Qj APPROPRIATIONS ACTS 

TITLE IV— GENERAL PROVISIONS 

Sec. 401. Where appropriations in titles I and II of this Act are 
expendable for travel expenses of employees and no specific limitation 
has been placed thereon, the expenditures for such travel expenses may 
not exceed the amounts set forth therefor in the budget estimates, 
submitted for the appropriations : Provided^ That this section shall 
not apply to travel performed by uncompensated officials of local 
boards and appeal boards of the Selective Service System; to travel 
performed directly in connection with care and treatment of medical 
beneficiaries of the Veterans Administration; or to payments to inter- 
agency motor pools where separately set forth in the budget schedules : 
Provided further^ That the limitations may be increased by the Secre- 
tary when necessary to allow for travel performed by employees of 
the Department of Housing and Urban Development as a result of 
increased Federal Housing Administration inspection and appraisal 
workload. 

Sec. 402. Appropriations and funds available for the administrative 
expenses of the Department of Housing and Urban Development and 
the Selective Service System shall be available in the current fiscal 
year for purchase of uniforms, or allowances therefor, as authorized by 
law (5 U.S.C. 5901-5902); hire of passenger motor vehicles; and 
services as authorized by 5 U.S.C. 3109. 

Sec. 403. Funds of the Department of Housing and Urban Develop- 
ment subject to the Government Corporation Control Act or section 
402 of the Housing Act of 1950 shall be available, without regard to 
the limitations on administrative expenses, for legal services on a. 
contract or fee basis, and for utilizing and making payment for 
services and facilities of Federal National Mortgage Association, 
Government National Mortgage Association, Federal Home Loan 
Mortgage Corporation, Federal Financing Bank, Federal Reserve 
banks or any member thereof. Federal home loan banks, and any 
insured bank within the meaning of the Federal Deposit Insurance 
Corporation Act, as amended (12 U.S.C. 1811-1831). 

Sec. 404. None of the funds provided in this Act may be used for 
payment, through grants or contracts, to recipients that do not share 
in the cost of conducting research resulting from proposals for projects 
not specifically solicited by the Government : Provided^ That the extent 
of cost sharing by the recipient shall reflect the mutuality of interest 
of the grantee or contractor and the Government in the research. 

'Sec. 405. No part of any appropriation contained in this Act shall 
remain available for obligation beyond the current fiscal year unless 
expressly so provided herein. 

Sec. 406. No part of the funds appropriated under this Act may be 
used by the Environmental Protection Agency to administer or 
promulgate, directly or indirectly, any program to tax, limit or other- 
wise regulate parking that is not specifically required pursuant to 
subsequent lesfislation. 

Sec. 407. No funds appropriated by this Act may be expended— 
(1) pursuant to a certification of an officer or employee of the^ 
United States unless — 

(A) such certification is accompanied by, or is part of, a 
voucher or abstract which describes the payee or payees and: 



I 88 



APPROPRIATIONS ACTS §410' 

the items or services for which such expenditure is being 
made, or 

(B) the expenditure of funds pursuant to such certifica- 
tion, and without such a voucher or abstraxit, is specifically 
authorized by law ; and 
(2) unless such expenditure is subject to audit by the General 
Accounting Office or is specifically exempt by law from such an 
audit. 
Sfx. 408. Xo contract or budget authority provided in this Act for 
Annual Contributions for Assisted Housing, and no funds appropri- 
ated in this Act for Housing Payments, shall be subject to the Federal 
regulation defining the conditions under which two or more persons 
shall be eligible for admission to public housing as a family, which was 
promulgated bv the Department of Housing and Urban Development 
on May 9, 197T; at 24 CFR § 812.2(d) (1) . 

Sec' 409. Xone of the funds provided in this Act may be used, 
directly or through grants, to pay or to provide reimbursement for 
payment of a consultant (whether retained by the Federal Govern- 
ment or a grantee) at more than the daily equivalent of thft maximum 
rat« paid for GS-18, unless specifically authorized by law. 

Sec. 410. Xone of the funds provided in this Act to any department 
or agency may be expended for the transportation of any officer or 
employee of such department or agency between his domicile and his 
place of employment, with the exception of the Secretary of the 
Department of Housing and Urban Development, who, under title 5, 
United States Code, section 101, is exempted from such limitations. 

This Act may be cited as the "Department of Housing and Urban 
Development — Independent Agencies Appropriation Act, 1978". 
Approved October 4, 1977. 

EXCERTS FROM SUPPLEMENTAL APPROPRIATIONS 

ACT, 1977 

[Public Law 95-26, 91 Stat. 61] 

* * * * * m m 

CHAPTER V— DEPARTIMEXT OF HOUSIXG AXD URBAN 

DEVELOPMENT 

Housing Programs 

annual contributions for assisted housing 

The additional amount of contracts for annual contributions pro- 
vided under this heading in the Department of Housing and Urban 
Development-Independent Agencies Appropriation Act, 1977 (Public 
Law 94-378), is hereby increased, subject to the limitations contained 
therein, by $413,143,000 : Pro^nded, That the total new budget author- 
ity provided under this heading in said Act is hereby increased by 
$13,112,405,000 : Provided further, That $3,489,390,000 of such amount 
shall become available upon enactment into law of necessary author- 
izing legislation increasing the term of contracts permissible under 
said Act. 



145-704 0-79 



89 



APPROPRIATIONS ACTS 
HOUSING FOR THE ELDERLY OR HANDICAPPED 

The limitation on the aggregate loans that may be made under 
section 202 of the Housing Act of 1959 from the fund authorized by 
subsection (a) (4) of such section for the fiscal year 1977 is hereby 
increased by $100,000,000. 

HOUSING PAYMENTS 

For an additional amount for "Housing payments", $411,500,000. 

PAYMENTS FOR OPERATION OF LOW-INCOME HOUSING PROJECTS 

For an additional amount for "Payment for operation of low- 
income housing projects", $20,000,000. 

FEDERAL HOUSING ADMINISTRATION FUND 

For an additional amount for Federal Housing Administration 
Fund, $1,801,344,000, to remain available until expended: Provided^ 
That $15,000,000 shall be available for reimbursement to the Federal 
Housing Administration Funds for losses incurred under the urban 
homesteading program (12 U.S.C. I706e). 



For emergency mortgage relief payments and for other expenses 
authorized by title I of the Emergency Housing Act of 1975 (Public 
Law 94-50), $1,000,000. 



CHAPTER IX— MILITARY CONSTRUCTION 

Family Housing, Defense 

For an additional amount for Family housing. Defense, $60,000,000 
(and an increase of $35,000,000 in the limitation on Department of 
Defense, operation, maintenance; an increase of $15,000,000 in the 
limitation on Construction, Army; an increase of $5,000,000 in the 
limitation on Construction, Navy and Marine Corps; and an increase 
of $10,000,000 in the limitation on Construction, Air Force) : Pro- 
vided, That none of the funds appropriated herein shall be obligated 
until authorization for this appropriation is enacted. 

******* 

CHAPTER XIV 

* * * * « * * 

TITLE II-INCREASED PAY COSTS FOR THE FISCAL 

YEAR 1977 

For additional amounts for appropriation for the fiscal year 1977, 
for increased pay costs authorized by or pursuant to law, as follows: 



90 



APPROPRIATIONS ACTS §301 

DEPARTMENT OF AGRICULTURE 

(INCLTJDING TRANSFER OF FUNDS) 
******* 

Farmers Home Administration 

"Salaries and expenses", $5,836,000; 

* * * * * * * 

DEPARTMENT OF DEFENSE— MILITARY 

******* 

Family Housing 

"Family Housing, Defense", $5,512,000 (and an increase of 
$5,512,000 in the limitation on Department of Defense, operation, 
maintenance) ; 

******* 

DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT 

(including transfer of funds) 

Manage3IEnt and Administration 

"Salaries and expenses. Department of Housing and Urban Devel- 
opment", $12^63,000, of which $6,735,000 shall be provided by transfer 
from the various funds of the Federal Housing Administration ; 

OTHER INDEPENDENT AGENCIES 

******* 

Federal Home Loan Bank Board 

"Limitation on nonadministrative expenses. Federal Home Loan 
Bank Board" (increase of $900,000 in the limitation on nonadminis- 
trative expenses) ; 

******* 
TITLE III— GENERAL PROVISIONS 

Sec. 301. No part of any appropriation contained in this Act shall 
remain available for obligation beyond the current fiscal year unless 
expressly so provided herein. 

Sec. 302. Except where specifically increased or decreased elsewhere 
in this Act, the restrictions contained within appropriations, or provi- 
sions affecting appropriations or other funds, available during the 
fiscal year 1977, limiting the amounts which may be expended for 
personal services, or for purposes involving personal services, or 
amounts which may be transferred between appropriations or au- 
thorizations available for or involving such services, are hereby in- 



91 



g303 APPROPRIATIONS ACTS 

creased to the extent necessary to meet increased pay costs authorized 
by or pursuant to law. ^. , ^_ ^ . , 

Sec. 303. None of the funds made available under Title II of this 
Act shall be available for any purpose other than increased pay costs 
authorized by or pursuant to law. ^ ^ 

Sec. 304. None of the funds appropriated or otherwise made avail- 
able in this Act shall be obligated or expended for the termination 
or deferral of any project, activity, or weapons system approved by 
Congress, except specific projects, activities, or weapons systems for 
which, and to the extent, budget authority has been rescinded or de- 
ferred as provided by law. 

iH ¥ * * * * * 

Approved May 4, 1977. 

EXCERPTS FROM DEPARTMENT OF HOUSING AND URBAN DEVELOP- 
MENT; SPACE, SCIENCE, VETERANS, AND CERTAIN OTHER INDE- 
PENDENT AGENCIES APPROPRIATION ACT, 1975 

[Public Law 93-414, 88 Stat. 1095] 

AN ACT Making appropriations for the Department of Housing and Urban 
Development; for space, science, veterans, and certain other independent 
executive agencies, boards, commissions, corporations, and offices for the fiscal 
year ending June 30, 1975, and for other purposes. 

Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assemhled^ That the following 
sums are appropriated, out of any money in the Treasury not otherwise 
appropriated, for the Department of Housing and Urban Develop- 
ment ; for space, science, veterans, and certain other independent exec- 
utive agencies, boards, commissions, corporations, and offices for the 
fiscal year ending June 30, 1975, and for other purposes, namely : 



92 



APPROPRIATIONS ACTS 

TITLE I— DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT 

Housing Produciion and Mortgage Credit 

salaries and exrenses, housing production and mortgage credit 

FROGR/\MS 

For necessary administrative expenses of housing production and 
mortgage credit, not otherwise provided for $13,233,000: Provided^ 
That none of these administrative funds may be used for the adminis- 
tration of the section 23 leasing program, or any replacement program, 
unless the available, unused balance of contract authority under the 
section 236 program, or any replacement program, is made available 
for commitment concurrent with the making available for commit- 
ment of any contract authority under the section 23 program, or any 
replacement program. 

Government National Mortgage Association 

payment of participation sales insufficiencies 

For the payment of such insufficiencies as may be required by the 
Government National Mortgage Association, as trustee, on accoimt 
of outstanding beneficial interests or participations in assets of the 
Department of Housing and Urban Development (including the Gov- 
ernment National Mortgage Association) authorized by the Independ- 
ent Offices and Department of Housing and Urban Development 
Appropriation Act, 1968, to be issued pursuant to section 302(c) of 
the Federal National Mortgage Association Charter Act, as amended, 
$22,883,000. 



93 



APPROPRIATIONS ACTS 
Housing Management 

HOUSING PAYMENTS 



For the payment of annual contributions to public housing agencies 
in accordance with section 10 of the United States Housing Act of 
1937 as amended (42 U.S.C. 1410) ; for payments authorized by title 
IV of the Housing Act of 1950, as amended (12 U.S.C. 1749 et seq.) ; 
for rent supplement payments authorized by section 101 of the Hous- 
in<^ and Urban Development Act of 1965, as amended (12 U.S.C. 
1701s) ; and for homeownership and interest reduction payments as 
authorized by sections 235 and 236, of the National Housing Act, as 
amended (12 U.S.C. I715z, 1715z-l), $2,300,000,000, of which not 
less than $450,000,000 shall be used only for the payment of operating 
subsidies to local housing authorities. 



SALARIES AND EXPENSES, HOUSING MANAGEMENT PROGRAMS 

For necessary administrative expenses of programs of housing man- 
agement, not otherwise provided for, $23,400,000: Provided, That 
administrative expenses in connection with the Revolving fund 
(liquidating programs) shall be exclusive of expenses necessary in the 
case of defaulted obligations to protect the interests of the 
Government. 

Community Planning and Development 

urban renewal programs 

For grants for urban renewal, fiscal year 1975, as an additional 
amount for urban renewal programs, as authorized by title I of the 
Housing Act of 1949, as amended (42 U.S.C. 1450 et seq.), and section 
314 of the Housing Act of 1954, as amended (42 U.S.C. 1452a), 
$197,000,000, to remain available until expended: Provided^ That no 
part of any appropriation in this Act shall be used for administrative 
expenses in connection with commitments for grants aggregating 
more than the total of amounts available in the current year from the 
amounts authorized for making such commitments through June 30, 
1967, plus the additional amounts appropriated therefor. 

MODEL cities PROGRAMS 

For financial assistance in connection with planning and carrying 
out comprehensive city demonstration programs pursuant to title I 
of the Demonstration Cities and Metropolitan Development Act of 
1966, as amended (42 U.S.C. 3301), $123,375,000, to remain available 
until June 30, 1976, of which $1,000,000 shall be available only for 
rehabilitation and redevelopment of the DeKalb County, Tennessee, 
model cities area devastated by recent tornado damage. 



94 



APPROPRIATIONS ACTS 
COMPREHENSIVE PLANNING GRANTS 

For comprehensive planning grants as authorized by section 701 of 
the Housing Act of 1954, as amended (40 U.S.C. 461), $100,000,000, 
to remain available until expended. 

SALARIES AND EXPENSES, COMMUNITY PLANNING AND DEVELOPMENT 

PROGRAMS 

For necessary administrative expenses of programs of community 
planning and development, not otherwise provided for, $39,000,000. 

Federal Insurance Administration 

FLOOD INSUPcxVNCE 

For necessary administrative expenses, not otherwise provided for, 
in carrying out the National Flood Insurance Act of 1968, as amended 
(42 U.S.C. Chap. 50), $50,000,000. 

Policy De\'elopment and Research 

research and technology 

For contracts, grants and necessary expenses of programs of 
research and studies i-elating to housing and urban problems, not 
otherwise provided for, as authorized by title V of the Housing and 
Urban Development Act of 1970 (12 U.S.C. I701z-1 et seq.), includ- 
ing carrying out the functions of the Secretarv under section 
1(a) (l)(i) of Reorganization Plan No. 2 of 1968, $65,000,000, to 
remain available until June 30, 1976. 

salaries and expenses, policy development and RESEARCH 

For necessary administrative expenses of programs of policy devel- 
opment and research, not otherwise provided for, $6,130,000. 

fair housing and EQUAL OPPORTUNITY 

For expenses necessary to carry out the functions of the Secretary 
pursuant to title VIII of the Civil Rights Act of 1968 (42 U.S.C. 
3601), and other equal opportunity and fair housing programs author- 
ized by law, not otherwise provided for, $11,543,000. 

Departmental ^Ianagement 

general departmental management 

For necessary administrative expenses of the Secretary, not other- 
wise provided for, in overall program planning and direction in the 
Department, including not to exceed $2,500 for official reception and 
representation expenses, $5,413,000. 



95 



APPROPRIATIONS ACTS 
SALARIES AND EXPENSES, OmCE OF GENERAL COUNSEL 

For necessary expenses of the Office of General Counsel, not other- 
wise provided for, $3,425,000. 

SALARIES AND EXPENSES, OFFICE OF INSPECTOR GENERAL 

For necessary expenses of the Office of Inspector General, not other- 
wise provided for, $6,626,000. 

ADMINISTRATION AND STAFF SERVICES 

For administrative expenses necessary in providing general admin- 
istration and staff services within the Department, not otherwise 
provided for $18,928,000. 

REGIONAL MANAGEMENT AND SERVICES 

For necessary administrative expenses, not otherwise provided for, 
of management and program coordination in the regional offices of the 
Department, $28,563,000. 

Federal Disaster Assistance Administration 
Funds Appropriated to the President 

disaster relief 

For expenses necessary to carry out the functions of the Department 
of Housing and Urban Development under the Disaster Eelief Act of 
1970, as amended, the Disaster Relief Act of 1974, and Eeorganization 
Plan No. 1 of 1973, authorizing assistance to States and local govern- 
ments in major disasters, $200,000,000, to remain available until 
expended : Provided^ That not to exceed 3 per centum of the foregoing 
amount shall be available for administrative expenses. 

TITLE II— SPACE, SCIENCE, VETERANS, AND CERTAIN 
OTHER INDEPENDENT AGENCIES 



Veterans Administration 



payment of participation sales insufficiencies 

For the payment of such insufficiencies as may be required by the 
(jo vernment National Mortgage Association, as trustee, on account of 
outstanding beneficial interests or participation in Direct loan revolv- 
ing tund assets or Loan guaranty revolving fund assets, authorized by 
tHe Independent Offices, and Department of Housing and Urban Devel- 
opment Appropriation Act, 1968, to be issued pursuant to section 302 

« ^ A ^ /i????f?^^ Jl'i^i?''?} Mortgage Association Charter Act, as 
amended (12 U.S.C. 1717(c) ), $1,828,000. 



96 



APPROPRIATIONS ACTS §401 

TITLE ni— COKPORATIONS 

The following corporations and agencies, respectively, are hereby 
authorized to make such expenditures, within the limits of funds and 
borrowing authority available to each such corporation or agency and 
in accord with law, and to make such contracts and commitments 
without regard to fiscal year limitations as provided by section 104 
of the Government Corporation Control Act, as amended, as may be 
necessary in carrying out the programs set forth in the budget for the 
current fiscal year for such corporation or agency except as hereinafter 
provided. 

Department of Housing and Urban Develop]ment 

limitation on administrative and nonadministrative expenses, 
federal housing administration 

For administrative expenses in carrying out duties imposed by or 
pursuant to law, not to exceed $13,803,000 of the various funds of the 
Federal Housing Administration shall be available, in accordance 
with the National Housing Act, as amended (12 U.S.C. 1701) : 
Provided^ That funds shall be available for contract actuarial services 
(not to exceed $1,500) : Provided further^ That nonadministrative 
expenses classified by section 2 of Public Law 387, approved Octo- 
ber 25, 1949, shall not exceed $190,500,000. 

LIMITATION ON AD:MINISTRATIVE EXPENSES, GOVERNMENT 
NATIONAL MORTGAGE ASSOCLiTION 

Not to exceed $8,080,000 shall be available for administrative 
expenses, which shall be on an accrual basis, and shall be exclusive of 
interest paid, expenses (including expenses for fiscal agency services 
performed on a contract or fee basis) in connection with the issuance 
and servicing of securities, depreciation, properly capitalized expendi- 
tures, fees for servicing mortgages, expenses (including services j)er- 
formed on a force account, contract or fee basis, but not including 
other personal services) in connection with the acquisition, protection, 
operation, maintenance, improvement, or disposition of real or per- 
sonal property belonging to said Association or in which it has an 
interest, cost of salaries, wages, travel, and other expenses of persons 
employed outside the continental United States, and all administra- 
tive expenses reimbursable from other Government agencies and from 
the Federal National Mortgage Association : Provided, That the dis- 
tribution of administrative expenses to the accounts of the Association 
snail be made in accordance with generally recognized accounting 
principles and practices. 



TITLE IV— GENERAL PROVISIONS 

Sec. 401. TV^iere appropriations in titles I and II of this Act as 
expendable for travel expenses of employees and no specific limitation 
has been placed thereon, the expenditures for such travel expenses 
may not exceed the amounts set forth therefor in the budget estimates 



97 



g402 APPROPRIATIONS ACTS 

submitted for the appropriations : Provided^ That this section shall 
not apply to travel performed by uncompensated officials of local 
boards -and appeal boards of the Selective Service System; to travel 
performed directly in connection with care and treatment of medical 
beneficiaries of the Veterans Administration ; or to payments to inter- 
agency motor pools where separately set forth in the budget schedules. 

*^Sec. 402. Appropriations and funds available for the administra- 
tive expenses of the Department of Housing and Urban Development 
and the Selective Service System shall be available in the current fiscal 
year for purchase of uniforms, or allowances thereof, as authorized 
by law (5 U.S.C. 5901-5902) ; hire of passenger motor vehicles; and 
services as authorized by 5 U.S.C. 3109. 

Sec. 403. Funds made available for the Department of Housing and 
Urban Development under title III of this Act shall be available, 
without regard to the limitations on administrative expenses, for legal 
services on a contract or fee basis, and for utilizing and making pay- 
ment for services and facilities of Federal National Mortgage Asso- 
ciation or Government National Mortgage Association, Federal re- 
serve banks or any member thereof. Federal home loan banks, and 
any insured bank within the meaning of the Federal Deposit Insur- 
ance Corporation Act, as amended (12 U.S.C. 1811-1831) . 

Sec. 404. None of the funds provided in this Act may be used for 
payment, through grants or contracts, to recipients that do not share 
in the cost of conducting research resulting from proposals for projects 
not specifically solicited by the Government : Provided^ That the extent 
of cost sharing by the recipient shall reflect the mutuality of interest of 
the grantee or contractor and the Government in the research. 

Sec. 405. No part of any appropriation, funds, or other authority 
contained in this Act shall be available for paying to the Adminis- 
trator of the General Services Administration in excess of 90 per 
centum of the standard level user charge established pursuant to sec- 
tion 210(j) of the Federal Property and Administrative Services Act 
of 1949, as amended, for space and services. 

Sec. 406. No part of any appropriations contained in this Act shall 
remain available for obligation beyond the current fiscal year unless 
expressly so provided herein. 

This Act may be cited as the "Department of Housing and Urban 
Development; Space, Science, Veterans, and Certain Other Independ- 
ent Agencies Appropriation Act, 1975". 

Approved September 6, 1974. 



EXCERPTS FROM SUPPLEMENTAL APPROPRIATIONS ACT, 1975 

[Public Law 93-554, 88 Stat. 1771] 

AN ACT Making supplemental appropriations for the fiscal year ending 
June 30, 1975, and for other purposes. 

Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assemUed, That the following 
sums are appropriated out of any money in the Treasury not otherwise 
appropriated, to supply supplemental appropriations (this Act may 
be cited as the "Supplemental Appropriations Act, 1975") for the 
fiscal year ending June 30, 1975, and for other purposes, namely: 

98 



APPROPRIATIONS ACTS §203 

TITLE I— CHAPTEE I— DEPAETIVIENT OF HOUSING AND 
URBAN DEVELOPMENT 

Community Planning and Development 

COMMUNITY development 

For contracts with and payments to States and units of general 
local government and for related expenses, not otherwise provided 
for, necessary for carrying out a community development grant pro- 
gram as authorized by Title I of the Housino^ and Community De- 
velopment Act of 1974 (P.L. 93-383, 88 S^tat. 633), $2,125,000,000, 
to remain available until September 30, 1977: Provided^ That upon 
the date funds become available for obligation under said title, there 
shall be transferred to and merged with appropriations and authority 
provided under this head, the uncommitted balances of funds provided 
for fiscal year 1975 for "Urban Eenewal Programs" and "Model Cities 
Programs" : Provided further^ That there is hereby appropriated an 
additional $50,000,000, to remain available until September 30, 1977, 
for urgent community development needs pursuant to section 103(b) 
of said title. 

Housing Production and IMortgage Credit 

housing for the elderly or handicapped 

The limitation on the aggregate loans that may be made under 
section 202 of the Housing Act of 1959, as amended, from the fund 
created by subsection (a) (4) (A) of such section, in accordance with 
subsection (a) (4) (C) of such section as added by section 210(d) (3) 
of the Housing and Community Development Act of 1974, is hereby 
established in the fiscal year ending June 30, 1975, at a level of $100,- 
000,000 in addition to the unobligated balance of the amounts hereto- 
fore appropriated to or otherwise deposited in such fund as of the end 
of month after the enactment of this paragraph. 



TITLE II— GENEEAL PEOVISIONS 

Sec. 201. No part of any appropriation contained in this Act shall 
remain available for obligation beyond the current fiscal year unless 
expressly so provided herein. 

Sec. 202. No part of any appropriation contained in this Act shall 
be available for paying to the Administrator of the General Services 
Administration in excess of 90 per centum of the standard level user 
charge established pursuant to section 210(j) of the Federal Property 
and Administrative Services Act of 1949, as amended, for space and 
services. 

Sec. 203. No part of any appropriation contained in this Act or 
any other Act may be used to pay any expenses of any kind to send, 
ship, transmit, convey, or deliver any of the Presidential documents, 
written materials, or tape recordings of former President Eichard 
M. Nixon from the custody of Federal officials or agencies now in 
possession of them until the passage by the Congress of legislation 
determining the disposition of said documents, written materials, and 

99 



2Q4 APPROPRIATIONS ACTS 



faT)e recordincrs: Promded, That this limitation shall expire on June 
30^1975: S vromded further, That, this limitation shall not 
nrevent compliance with subpenas duly issued by State or Federa 
Courts 01 by the United States House of Eepresentatives or the United 

^Se^ 20rNotwithstanding any other provision of law, appropria- 
tions provided in this or any other Act which would otherwise expire 
on June 30 of the calendar year 1976, or on such date of any sub- 
sequent calendar year, shall remain available until September 30 of 
each such calendar year. . . . ^ ^^ • .v. a ^ 

Sec. 205. None of the funds appropriated by this or any other Act 
which are available during the fiscal year 1975 for travel expenses, 
includin.o- subsistence allowances, of Government officers and employees 
may be oTDligated after the date of the enactment of this Act, at a rate 
for the balance of the fiscal year which exceeds 90 percent of the 
budget estimates for fiscal year 1975 for such expenses which were sub- 
mitted for appropriations or otherwise provided by law: Provided^ 
That none of the limitations on travel included in the regular appro- 
priations for fiscal year 1975 shall be exceeded. 

Approved December 27, 1974. 



EXCERPTS FROM SECOND SUPPLEMENTAL APPROPRIATIONS 

ACT, 1975 

[Public Law 94-32, 89 Stat. 173] 

4e « iC * * * * 

Department of Housing and Urban Development 

COMMUNITY development GRANTS 

For grants to States and units of general local government, to be 
used only for expenses necessary for carrying out a community devel- 
opment grant program authorized by section 106(d) (2) of title I of 
the Housing and Community Development Act of 1974, $54,625,000, 
to remain available until September 30, 1977. 

• * * ♦ « * * 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Housing Production and Mortgage Credit 

"Salaries and expenses, Housing production and mortgage credit 
programs", $440,000; 

"Limitation on administrative expenses. Federal Housino: Admin- 
istration" (increase of $427,000 in the limitation on administrative 
expenses) ; 

"Limitation on administrative expenses, Government National 
Mortgage Association" (increase of $33,000 in the limitation on 
administrative expenses) ; 

Housing Management 
"Salaries and expenses. Housing management programs", $697,000; 

100 



APPROPRIATIONS ACTS §302 

Community PiANiaNG and Development 

"Salaries and expenses, Community planning and development pro- 
grams", $1,219,000; 

Policy De\t:lopmext and Eesearch 
"Salaries and expenses. Policy development and research", $190.000 ; 

Fair Housing and Equal Opportunity 
"Fair housing and equal opportunity", $344,000 ; 
Departmental IVIanagement 

"General departmental management", $134,000 ; 

"Salaries and expenses, Office of general counsel", $123,000; 

"Salaries and expenses, Office of inspector general", $196,000 ; 

"Administration and staff services", $327,000 ; 

"Eegional management and services", $671,000 ; 

Ht ***** * 

TITLE III— GENERAL PROVISIONS 

Sec. 301. No part of any appropriation contained in this Act shall 
remain available for obligation beyond the current fiscal year unless 
expressly so provided herein. 

Sec. 302. Except where specifically increased or decreased elsewhere 
in this Act, the restrictions contained within appropriations, or pro- 
visions affecting appropriations or other funds, available during the 
fiscal year 1975, limiting the amounts which may be expended for 
personal services, or for purposes involving personal services, or 
amounts which may be transferred between appropriations or author- 
izations available for or involving such services, are hereby increased 
to the extent necessary to meet increased pay costs authorized by or 
pursuant to law. 

******* 

Approved June 12, 1975. 



EXCERPTS FROM DEPARTMENT OF HOUSING AND URBAN DEVELOP- 
MENT; SPACE, SCIENCE, VETERANS, AND CERTAIN OTHER INDE- 
PENDENT AGENCIES APPROPRIATION ACT, 1974 

[Public Law 93-137, 87 Stat. 491] 

AN ACT Making appropriations for the Department of Housing and Urban 
Development; for space, science, veterans, and certain other independent 
executive agencies, boards, commissions, and corporations for the fiscal year 
ending June 30, 1974, and for other purposes. 

Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress asserribJed^ That the following 
sums are appropriated, out of any money in the Treasury not other- 
wise appropriated, for the Department of Housing and Urban Devel- 
opment; for space, science, veterans, and certain other independent 

101 



APPROPRIATIONS ACTS 

executive agencies, boards, commissions, and corporations for the 
fiscal year ending June 30, 1974, and for other purposes, namely: 

TITLE I— DEPARTMENT OF HOUSING AND 
URBAN DEVELOPMENT 

Housing Production and Mortgage Credit 

SALARIES AND EXPENSES, HOUSING PRODUCTION AND MORTGAGE CREDIT 

PROGPcAMS 

For necessary administrative expenses of housing production and 
mortgage credit, not otherwise provided for, $5,120,000. 

Government National [Mortgage Association 

PAYMENT of PARTICIPATION SALES INSUFFICIENCIES 

For the payment of such insufficiencies as may be required by the 
Government National Mortgage Association, as trustee, on account of 
outstanding beneficial interests or participations in assets ^ of the 
Department of Housing and Urban Development (including the 
Government National Mortgage Association) authorized by the Inde- 
pendent Offices and Department of Housing and Urban Development 
Appropriation Act, 1968, to be issued pursuant to section 302 (c) of the 
Federal National Mortgage Association Charter Act, as amended, 
$19,821,000. 

Housing Management 

HOUSING payments 

For the payment of annual contributions to public housing agencies 
in accordance with section 10 of the United States Housing Act of 
1937, as amended (42 U.S.C. 1410) ; for payments authorized by title 
IV of the Housing Act of 1950, as amended (12 U.S.C. 1749 et seq.) ; 
for rent supplement payments authorized by section 101 of the Hous- 
ing and Urban Development Act of 1965, as amended (12 U.S.C. 
1701s) ; and for homeownership and interest reduction payments as 
authorized by sections 235 and 236, of the National Housing Act, as 
amended (12 U.S.C. 17l5z, 17l5z-l), $2,020,000,000, of which, not less 
tlian $280,000,000 shall be used only for the payment of operating 
subsidies to local housing authorities. 

salaries and expenses, housing management PROGRAMS 

For necessary administrative expenses of programs of housino- 
management, not otherwise provided for, $23,900,000 : Provided, That 
n^n'!^f f^"" '""^ expenses in connection with the Revolving fund 
thp^ nncf. ""! ^^TT^) 'i^^^ ^^ exclusive of expenses nece^ry in 
Gover t ^^^''''^^^^ obligations to protect the interests of the 



102 



APPROPRIATIONS ACTS 

Community Planning and Management 
comprehensrvt: planning grants 

For comprehensive planning grants as authorized by section 701 
of the Housing Act of 1954, as amended (40 U.S.C. 461), $75,000,000, 
to remain available until expended. 

SALARIES AND EXPENSES, COMMUNITY PLANNING AND MANAGEMENT 

PR0GRA31S 

For necessary administrative expenses of programs of community 
planning and management, not otherwise provided for, $10,134,000. 

Community Develop:ment 

MODEL cities PROGRAMS 

For financial assistance in coimection with planning and carrying 
out comprehensive city demonstration programs, as authorized by title 
I of the Demonstration Cities and Metropolitan Development Act of 
1966, as amended (42 U.S.C. 3301), $150,000,000, to remain available 
until June 30, 1975. 

URBAN RENEWAL PROGRAMS 

For grants for urban renewal, fiscal year 1974, as an additional 
amount for urban renewal programs, as authorized by title I of the 
Housing Act of 1949, as amended (42 U.S.C. 1450 et seq.), and sec- 
tion 314 of the Housing Act of 1954, as amended (42 U.S.C. 1452a), 
$600,000,000, to remain available until expended : Provided^ That no 
part of any appropriation in this Act shall be used for administrative 
expenses in connection with commitments for grants aggregating 
more than the total of amounts available in the current year from 
the amounts authorized for making such commitments through 
June 30, 1967, plus the additional amounts appropriated therefor. 

OPEN SPACE LAND PR0GRA3IS 

For grants as authorized by title VII of the Housing Act of 1961, as 
amended (42 U.S.C. 150O-1500e), and the provision of technical 
assistance to State and local public bodies, $25,000,000, to remain 
available until expended : Provided^ That no part of this appropria- 
tion may be used for financing a grant in excess of 50 per centum of 
the cost of any activity or project, except that grants made pursuant 
to section 706 of the Housing Act of 1961, as amended (42 U.S.C. 
1500), may be made in an amount not to exceed 75 per centum. 

SALARIES AND EXPENSES, COMMUNITY DEVELOPMENT PROGRAMS 

For necessary administrative expenses of programs of community 
development, not otherwise provided for, $22,413,000. 

Federal Insurance Administration 

flood insurance 

For necessary administrative expenses, not otherwise provided for, 
in carrvinof out the National Flood Insurance Act of 1968, as amended 
(42 U.S.CrChap. 50) , $20,000,000. 

103 , 



APPROPRIATIONS ACTS 
RESEARCH AND TECHNOLOGY 

For contracts, grants and necessary expenses of programs of re- 
search and studies relating to housing and urban problems, not other- 
wise provided for, as authorized by title V of the Housing and Urban 
Development Act of 1970 (12 U.S.C. lTOlz-1 et seq.) , including carry- 
ing out the functions of the Secretary under section 1(a) (1) (i) of 
Reorganization Plan No. 2 of 1968, $65,000,000, to remain available 
until June 30, 1975 : Provided, That not to exceed $3,925,000 of the 
foregoing amount shall be available for administrative expenses. 

FAIR HOUSING AND EQUAL OPPORTUNITY 

For expenses necessary to carry out the functions of the Secretary 
pursuant to title VIII of the Civil Eights Act of 1968 (42 U.S.C. 
3601), section 3 of the Housing and Urban Development Act of 1968 
(12 U.S.C. I701u) , title VI of the Civil Rights Act of 1964 (42 U.S.C. 
2000d), and Executive Orders 11063 (27 Fed. Reg. 11527), 11246, as 
amended (30 Fed. Reg. 12319, 32 Fed. Reg. 14303) , 11625 (36 Fed. Reg. 
19967), and 11478 (34 Fed. Reg. 12985), $9,546,000. 

Departmental Management 

general departmental management 

For necessary administrative expenses of the Secretary, not other- 
wise provided for, in overall program planning and direction in the 
Department, including not to exceed $2,500 for official reception and 
representation expenses, $6,042,000. 

SALARIES AND EXPENSES, OFFIOE OP GENERAL COUNSEL 

For necessary expenses of the Office of General Counsel, not other- 
wise provided for, $3,166,000. 

SALARIES AND EXPENSES, OFFICE OP INSPECTOR GENERAL 

For necessary expenses of the Office of Inspector General, not other- 
wise provided for, $6,534,000. 

ADMINISTRATION AND STAFF SERVICES 

For administrative expenses necessary in providing general admin- 
istration and staff services within the Department, not otherwise pro- 
vided for, $11,460,000. 

REGIONAL MANAGEMENT AND SERVICES 

For necessary administrative expenses, not otherwise provided for, 
of management and program coordination in the regional offices of the 
Department, $19,780,000. ^ 

TITLE II-SPACE, SCIENCE, VETERANS, AND CERTAIN 
OTHER INDEPENDENT AGENCIES 



104 



APPROPRIATIONS ACTS 

Veterans Administration 

4c * ♦ 9ic 4e 9i( ♦ 

TAY^IENT OF PARTICIPATION SALES INSUFFICIENCIES 

For the payment of such insufficiencies as may be required by the 
Government National Mortgage Association, as trustee, on account of 
outstanding beneficial interests or participations in Direct loan revolv- 
ing fund assets or Loan guaranty revolving fund assets, authorized 
by the Independent Offices and Department of Housing and Urban 
Development Appropriation Act, 1968, to be issued pursuant to sec- 
tion 302(c) of the Federal National Mortgage Association Charter 
Act, as amended (12 U.S.C. 1717(c)), $4,400,000. 

TITLE III— CORPORATIONS 

The following corporations and agencies, respectively, are hereby 
authorized to make such expenditures, within the limits of funds and 
borrowing authority available to each such corporation or agency and 
in accord with law, and to make such contracts and commitments with- 
out regard to fiscal year limitations as provided by section 104 of the 
Government Corporation Control Act, as amended, as may be neces- 
sary in carrying out the programs set forth in the budget for the 
current fiscal year for such corporation or agency except as hereinafter 
provided : 

Department of Housing and Urban Development 

limitation on administrative and non administrative expenses, 
federal housing administration 

For administrative expenses in carrying out duties imposed by or 
pursuant to law, not to exceed $15,080,000 of the various funds of the 
Federal Housing Administration shall be available, in accordance with 
the National Housing Act, as amended (12 U.S.C. 1701) : Provided, 
The funds shall be available for contract actuarial services (not 
to exceed $1,500) : Provided further. That nonadministrative expenses 
classified by section 2 of Public Law 387, approved October 25, 1949 
shall not exceed $175,851,000. 

LIMITATION ON ADMINISTRATIVE EIXPENSES, GOVERNMENT NATIONAL 
MORTGAGE ASSOCIATION 

Not to exceed $7,750,000 shall be available for administrative 
expenses, which shall be on an accrual basis, and shall be exclusive 
of mterest paid, expenses (including expenses for fiscal agency serv- 
ices performed on a contract or fee basis) in connection with the 
issuance and servicing of securities, depreciation, properlv capitalized 
expenditures, fees for servicing mortgages, expenses (including serv- 
ices performed on a force account, contract or fee basis, but not 
including other personal services) in connection with the acquisition, 

45-704 0-79-8 105 



401 



APPROPRIATIONS ACTS 



protection, operation, maintenance, improvement, or disposition of 
?eal or personal property belonging to said Association or m which 
it has an interest, cost of salaries wages traye, and other expenses 
of persons employed outside of the continental United States, and 
all administrative expenses reimbursable from other Government 
agencies and from the Federal National Mortgage Association: Pro- 
vided That the distribution of administrative expenses to the accounts 
of the Association shall be made in accordance with generally recog- 
nized accounting principles and practices. 

^ * ***** 

TITLE IV— GENERAL PROVISIONS 

Sec 401. Where appropriations in titles I and II of this Act are 
expendable for travel expenses of employees and no specific limitation 
has been placed thereon, the expenditures for such travel expanses 
mav not exceed the amounts set forth therefor in the budget estimates 
submitted for the appropriations: Provided, Th^t this section shall 
not apply to travel performed by uncompensated officials of local 
boards and appeal boards of the Selective Service System; to travel 
performed directly in connection with care and treatment of medical 
beneficiaries of the Veterans Administration ; or to payments to inter- 
agency motor pools where separately set forth in the budget schedules. 

Sec. 402. Appropriations and funds available for the administrative 
expenses of the Department of Housing and Urban Development and 
the Selective Service System shall be available in the current fiscal 
year for purchase of uniforms, or allowances thereof, as authorized 
by law (5 U.S.C. 5901-5902) ; hire of passenger motor vehicles; and 
services as authorized by 5 U.S.C. 3109. 

Sec. 403. Funds made available for the Department of Housing and 
Urban Development under title III of this Act shall be available 
without regard to the limitations on administrative expenses, for legal 
services on a contract or fee basis, and for utilizing and making pay- 
ment for services and facilities of Federal National Mortgage Associa- 
tion or Government National Mortgage Association, Federal Reserve 
banlvs or any member thereof. Federal home loan banks, and any in- 
sured bank within ih^ meaning of the Federal Deposit Insurance Cor- 
poration x\ct, as amended (12 U.S.C. 1811-1831). 

Sec. 404. None of the funds provided in this Act may be used for 
payment, through grants or contracts, to recipients that do not share 
m the cost of conducimg research resulting from proposals for projects 
not specifically solicited by the Government : Provided, That the extent 
of cost sharing by the recipient shall reflect the mutuality of interest of 
the grante^e or contractor and the Government in the research, 
exceed ^495 000 nT^^^^^^ ^^^'^ provision of this Act, not to 

S)mmmfi;nHnL P^ ^^'^''''^ ^^""T ^'^^^^ available for the Federal" 

STTOG Cn.^tTf ''''^'^ "^^^ ^^ ^'^^^ f«^ ^^^d ^^d structures, 
remain avaihhlpfn ^n^^ appropriations contained in this Act shall 
e~ly\^c; ptiS ^^>^^-^ ^^- — t fi-1 year unless 




106 



APPROPRIATIONS ACTS §406 

EXCERPTS FROM AGRICULTURE-ENVIRONMENTAL AND CONSUMER 
PROTECTION APPROPRIATION ACT, 1974 

[Public Law 93-135, 87 Stat. 468] 
^ * * * * * * 

/ay:mext of participation sales ixsufficiexcies 

For payment to the Government National [Mortgage Association, as 
trustee, such insufficiencies as may be required by the trustee on account 
of outstanding beneficial interests or participations authorized by 
Title II. Public Law 90-113. issued pursuant to section o02(c) of 
the Federal National Mortgage Association Charter Act, as amended 
(12 U.S.C. 1717(c)), such sums as may be necessary, to be available 
without fiscal year limitations. 

******* 

Departaiext of IIousixg ax'd Urbax De\telopmext 

graxts for basic water axd sewer facilities 

For grants authorized by section 702 of the Housing and Urban 
Development Act of 19G5 (42 U.S.C. 3102), $400,000,000, to remain 
available until expended, Avhich siiall be derived from the unexpended 
bahmce of amounts appropriated under this head in Pulilic Law 92-73 
and continued to be available bv Public Law 92-399 : Provided, That 
$100,000,000 of these funds shall be available for transfer to the En- 
vironmental Protection Agency to fund storm and combined sewer 
projects for the Great Lakes area. 

Approved October 24, 1973. 



EXCERPTS FROM DEPARTMENT OF HOUSIXG AND URBAN DEVELOP- 
MENT; SPACE, SCIENCE, VETERANS, AND CERTAIN OTHER INDE- 
PENDENT AGENCIES APPROPRIATION ACT, 1973 

[Public Lav,' 92-383, 86 Stat. 540] 
RENT SUFPLEMEXT PROGRAM 

The limitation otherwise applicable to the maximum payments that 
may be required in any fiscal year by all contracts entered into under 
section 101 of the Housing and L^ban Development Act of 1965 (12 
U.S.C. 1701s) is increased by $48,000,000: Provided, That no part of 
the foregoing contract authority shall be used for incurring any obli- 
gation in connection with any dwelling unit or project which is not 
eitiier part of a workable prograni for communit}' improvement meet- 
ing the requirements of section 101(c) of the Housing Act of 1949, 
as amended (42 U.S.C. 1451(c)), or which is without local official 
approval for participation in this program. 



DISASTER ASSISTANCE 

Sec. 406. The Secretary of Housing and Urban Development is 
authorized to establish a fund and to transfer to such fund from appro- 
priations or funds available to the Department of Housing and Urban 



107 



APPROPRIATIONS ACTS 



Development, such amounts as may be necessary to provide disaster 
assSancT f or which the Secretary has been requested by the Director 
^f fvl Offipe of Emergency Preparedness to make resources available 
pL^^^^^^^^^ auTo'nty of the^Disaster Eelief Act of 1970 (84 Stat. 



1744) 

♦ ♦ * 

Approved August 14, 1972. 



EXCERPTS FROM THE INDEPENDENT OFFICES APPROPRIATION 

ACT, 1955 

[Public Law 83-428, 68 Stat. 272, 295] 



TITLE II— COEPOEATIONS 

The following corporations and agencies, respectively, are hereby 
authorized to make such expenditures, vrithin the limits of funds and 
borrowing authority available to each such corporation or agency and 
in accord with law, and to make such contracts and commitments 
without regard to fiscal year limitations as provided by section 104 of 
the Government Corporation Control Act, as amended, as may be nec- 
essary in carrying out the programs set forth in the Budget for the 
fiscal year 1955 for each such corporation or agency, except as herein- 
after provided : 

HOUSING AND HOME FINANCE AGENCY 

Federal National Mortgage Association: Not to exceed $3,238,000 
«hall be available for administrative expenses, which shall be on an 
accrual basis, and shall be exclusive of interest paid, depreciation, 
properly capitalized expenditures, fees for serving mortgages, ex- 
penses (including services performed on a force account, contract, or 
fee basis, but not including other person services) in connection with 
the acquisition, protection, operation, maintenance, improvement, or 
disposition of real or personal property belonging to said Associa- 
tion or in which it has an interest, cost of salaries, wages, travel, and 
other expenses of persons employed outside of the continental United 
States, expenses of services performed on a contract or fee basis in 
connection with the performance of legal services, and all administra- 
tive expenses reimbursable from other Government agencies ; and said 
Association may utilize and may make payment for services and 
facilities of the Federal Reserve banks and other agencies of the" 
Government: Promded, That the distribution of administrative 
expenses to the accounts of the Association shall be made in accord- 
ance with generally recognized accounting principles and practices : 
Provided further That not to exceed $87,750 shall be available for 
expenses of travel: Provided further, That administrative expenses 
not under limitation for the purposes set forth in the budget schedules 
lor the hscal year 1955 shall not exceed $150,000 

^iJ^o^''^''//^'^ ^'^^ioifi^^.^.^'''"' housing loans to educational institu- 
tions: Not to exceed $375,000 shall be available for all administrative 

108 



APPROPRIATIONS ACTS 

expenses, which shall be on an accrual basis, of carrying out the func- 
tions of the Office of the Administrator under the program of housmg 
loans to educational institutions (title IV of the Housing Act of 1950, 
12 U.S.C. 174-9-1749d), but this amount shall be exclusive of payment 
for services and facilities of the Federal Reserve banks or any member 
thereof, the Federal home-loan banks, and any insured bank within 
the meaning of the Act creating the Federal Deposit Insurance Corpo- 
ration (Act of August 23, 1935, as amended, 12 U.S.C. 264) which 
has been designated by the Secretary of the Treasury as a depository 
of public money of the United States : Provided^ That not to exceed 
$19,000, shall be available for expenses of travel. 

Office of the Administrator, revolving fund (liquidating programs) : 
There is established as of June 30, 1954, a revolving fund, and the 
Administrator is authorized to credit said fund with all moneys 
hereafter obtained or now held by him or by any constituent agency 
of the Housing and Home Finance Agency by any other official 
thereof, and to account under said fund for all assets and liabilities, 
in connection with (1) communitv facilities provided or assisted under 
title II of the Lanham Act, as Amended (42 U.S.C. 1531-1534), or 
under title III of the Defense Housing and Communitv Facilities and 
Services Act of 1951, as amended (42 U.S.C. 1592-1592n) ; (2) loans 
or advances made pursuant to title V of the War Mobilization and 
Reconversion Act of 1944 (58 Stat. 791), or the Act of October 13, 
1949 (40 U.S.C. 451-458) ; (3) functions transferred under Reorgani- 
zation Plan No. 23 of 1950 (5 U.S.C. 133z-15, note), or authorized 
under sections 102, 102a, 102b, and 102c of the Housing Act of 1948, 
as amended (12 U.S.C. 1701g-1701g-3) ; (4) notes or other obliga- 
tions purchased pursuant to the Alaska Housing Act, as amended 
(48 U.S.C. 484 (a)); (5) subsistence homesteads and greentowns 
(Acts of June 29, 1936, 49 Stat. 2035, and May 19, 1949, 63 Stat. 68) ; 
(6) public war housing under title I of the Lanham Act, as amended 
(42 U.S.C. 1521-1524), and defense housing under title III of the 
Defense Housing and Community Facilities and Services Act of 1951, 
as amended (42 IJ.S.C. 1592-1592n) ; and (7) veterans' re-use housing 
under title V of the Lanham Act, as amended (42 U.S.C. 1571-1575) : 
Provided^ That said fund shall be available for all necessary expenses 
(including administrative expenses) in connection with the liquida- 
tion of the programs carried out pursuant to the foregoing provisions 
of law, including operation, maintenance, improvement, or disposition 
of facilities, and for disbursements pursuant to outstanding commit- 
ments against moneys herein authorized to be credited to said fund, 
repayment of obligations to the Treasury, and refinancing and refund- 
ing operations on existing loans : Provided further^ That any amount 
in said fund which is determined to be in excess of requirements for 
the purposes hereof shall declared and paid as liquidating dividends 
to the Treasury not less often than annually : Provided further^ That 
during the current fiscal year not to exceed $3,940,000 shall be available 
for administrative expenses (including not to exceed $265,000 for 
travel) for the foregoing purposes, but this amount shall be exclusive 
of costs of services performed on a contract or fee basis in connection 
with termination of contracts and legal services on a contract or fee 
basis and of payment for services and facilities of the Federal Reserve 
.banks or any member thereof, any servicer approved by the Federal 



109 



APPROPRIATIONS ACTS 

National Mortgage Association, the Federal home-loan banks, and any 
insured bank within the meaning of the Act of August 23, 1935, as 
amended, creating the Federal Deposit Insurance Corporation (12 
U.S.C. 264) which has been designated by the Secretary of the 
Treasury as a depository of public money of the United States : Pro- 
vided further^ That after the effective date of this Act no additional 
notes or obligations shall be purchased from funds appropriated pur- 
suant to the Alaska Housing Act, as amended (48 U.S.C. 484 (d)), 
except for the furtherance or refinancing of an existing loan: Pro- 
vided further^ That except for extensions, or refinancing, of existing 
obligations the authority to issue obligations to the Secretary of the 
Treasury under section 1 (4) of Reorganization Plan No. 23 of 1950 
(5 U.S.C. 1332-15, note), shall terminate on June 30, 1954: Provided 
further^ That all expenses, not otherwise specifically limited in this 
Act, in connection with the programs administered pursuant to the 
foregoing provisions of laAv shall not exceed $20,000,000. 

:jc « :^ * * * * 

Approved June 24, 1954. 



EXCERPTS FROM DEPARTMENT OF HOUSING AND URBAN DEVELOP- 
MENT—INDEPENDENT AGENCIES APPROPRIATION ACT, 1977 

[Public Law 94-378, 90 Stat. 1095] 

AN ACT Making appropriations for the Department of Housins: and Urban Devel- 
opment, and for sundry independent executive agencies, boards, bureaus, com- 
missions, corporations, and offices for the fiscal year ending September 30, 1977, 
and for other purposes. 

Be in enacted hy the Senate and House of Representatives of the 
United States of America in Congress assemhJed, That the following 
sums are appropriated, out of any money in the Treasury not other- 
wise appropriated, for the Department of Housing and Urban Devel- 
opment, and for sundry independent executive agencies, boards, 
bureaus, commissions, corporations, and offices for the fiscal year end- 
ing September 30, 1977, and for other purposes, namely : 

TITLE I 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Housing Programs 

ANNUAL CONTRIBUTIONS FOR ASSISTED HOUSING 

The additional amount of contracts for annual contributions, not" 
otherwise provided for, as authorized by section 5 of the United States 
Housing Act of 1937, as amended (42 U.S.C. 1437c), entered into after 
beptember 30, 1976, shall not exceed $675,000,000 including not more 
than $35,000,000 for the modernization of existing low-income housing 
projects, which amounts shall be in addition to balances of authoriza- 
tion lieretof ore made available for such contracts : Provided, That the 



110 



APPROPRIATIONS ACTS 

total new budget authority obligated under such contracts entered in^o 
after September 30, 1976, shall not exceed $14,870,400,000, which 
amount shall not include budget authority obligated under balances of 
authorization heretofore made available : Prcyvided further^ That of the 
total herein provided, excluding funds for modernization, not more 
than $120,000,000 shall be used only for contracts for annual contribu- 
tions to assist in financing the development or acquisition of low-income 
housing projects to be owned by public housing agencies other than 
under section 8 of the above Act: Provided further^ That of the 
amount set forth in the second proviso, not more than $85,000,000 shall 
be used only for projects on which construction or substantial rehabili- 
tation is commenced after the effective date of this Act except in the 
case of amendments to existing contracts : Provided further^ That of 
the amount set forth in the second proviso, not less than 15 per centum 
shall be used only with respect to new construction in non-metropoli- 
tan areas. 

HOUSING FOR THE ELDERLY OR HANDICAPPED 

The limitation on the aggregate loans that may be made under 
section 202 of the Housing act of 1959, as amended, from the fund 
authorized by subsection (a) (4) of such section, is hereby established 
for the fiscal year 1977 at $750,000,000 in accordance with paragraph 
(C) of such subsection, which funds shall be available only to qualified 
nonprofit sponsors for the purpo-e of providing 100 per centum loans 
for the development of housing for the elderly or handicapped, with 
any cash equity or other financial commitments imposed as a condition 
of loan approval to be returned to the sponsor if sustaining occupancy 
is achieved in a reasonable period of time: Provided^ That the full 
amount shall be available for permanent financing (including con- 
struction financing) for housing projects for the elderly or handi- 
capped: Provided, further^ That the Secretary may borrow from the 
Secretary of the Treasury in such amounts as are necessai*y to provide 
the loans authorized herein. 

HOUSING PAYMENTS 

For the payment of annual contributions, not otherwise provided 
for, in accordance with section 5 of the United States Housing Act 
•of 1937, as amended (42 U.S.C. 1437c) ; for payments authorized by 
title IV of the Housing Act of 1950, as amended (12 U.S.C. 1749 et 
seq.) ; for rent supplement payments authorized by section 101 of the 
Housing and Urban Development Act of 1965, as amended (12 U.S.C. 
1701s) ; for payments as authorized by sections 235 and 236, of the 
National Housing Act, as amended (12 U.S.C. 1715z, 1715z-l) ; and 
for payments as authorized by section 802 of the Housing and Com- 
munity Development Act of 1974 (88 Stat. 633), $2,975,000,000: Pro- 
vided^ That excess rental charges credited to the Secretary in ac- 
cordance with section 236(g) of the National Housing Act, as 
amended, shall be available, in addition to amounts appropriated 
herein, for the payments on contracts entered into pursuant to the 
authorities enumerated above. 



Ill 



APPROPRIATIONS ACTS 
PAYMENTS FOR OPERATION OP LOW-INCOME HOUSING PROJECTS 

For annual contributions to public bousing agencies for the payment 
of operating subsidies for low-income housing projects as authorized 
by section 9 of the United States Housing Act of 1937, as amend3d (42 
U.S.C. 1437g), $575,600,000: Provided, That the aggregate amount 
of contracts for annual contributions entered into for such payments 
shall not exceed $575,600,000. 

MOBILE HOME STANDARDS PROGRAM 

For necessary expenses, not otherwise provided for, to carry out the 
National Mobile Home Construction and Safety Standards Act of 
1974 (42 U.S.C. 5401-5426) , $1,000,000. 

FEDERAL HOUSING ADMINISTRATION FUND 

For payment to cover losses, not otherwise provided for, sustained 
by the Special Eisk Insurance Fund and the General Insurance Fund, 
$135,000,000, to remain available until expended, as authorized by the 
National Housing Act, as amended. 

HOUSING COUNSELING ASSISTANCE 

For contracts, grants, and other assistance, not otherwise provided 
for, of providing counseling and advice to tenants and homeowners — 
both current and prospective — with respect to property maintenance, 
financial management, and such other matters as may be appropriate 
to assist thera in improving their housing conditions and meeting the 
responsibilities of tenancy or homeownership, including provisions for 
training and for support of voluntary agencies and services as author- 
ized by section 106(a) (1) (iii) and section 106(a) (2) of the Housing 
and Urban Development Act of 1968, as amended, $3,000,000. 

Government National Mortgage Association 

payment of participation sales insufficiencies 

For the payment of such insufficiencies as may be required by the 
Government National Mortgage Association, as trustee, on account 
ot outstanding beneficial interests or participations in assets of the 
department of Housmg and Urban Development (including the Gov- 
ernment National Mortgage Association) authorized by the Inde- 
pendent Offices and Department of Housing and Urban Develop- 
ment .Appropriation Act, 1968, to be issued pursuant to section 302 

o^^ A ^ loi cJi^/nL-^^^'^''^^ Mortgage Association Charter Act, as 
amended, $21,265,000. 



112 



APPROPRIATIONS ACTS 
Community Planning and Development 
community development grants 

For contracts with and payments to States and units of general 
local government and for related expenses, not otherwise provided 
for, necessary for carrying out a community development grant 
proo-ram as authorized by Title I of the Housing and Community 
DcA^elopment Act of 1974 (P.L. 93-383, 88 Stat. 633), $3,148,000,000 
of which $200,000,000 sliall be used for the purposes stated in section 
103(a) (2) of said Act except that not more than $100,000,000 of the 
amount so provided may be used for the purposes of section 106 
(d) (1) , to remain available until September 30, 1979. 

For grants to units of general local government for urgent com- 
munity development needs pursuant to section 103(b) of Title I of 
the Housing and Community Development Act of 1974, $100,000,000, 
to remain available until September 30, 1979. 

COMPREHENSI\'E PLANNING GRANTS 

For comprehensive planning grants as authorized by section 701 
of the Housing Act of 1954, as amended (40 U.S.C. 461), $62,500,000, 
to remain available until expended. 

REHABILITATION LOAN FUND 

FoT the revolving fund established pursuant to section 312 of the 
Housing Act of 1964, as amended (42 U.S.C. 1452b), $50,000,000, 
which amount shall be augmented by any previously appropriated 
funds which would otherwise become unavailable after August 22, 
1976 : Provided^ That the aggregate amount of commitments for loans 
made from the fund for the fiscal year 1977 shall not exceed the total 
of loan repayments and other income available during such period, 
less operating costs, plus the aggregate amount provided herein. 

Federal Insurance Adzvonistration 

flood insurance 

For necessary expenses, not otherwise provided for in carrying out 
the National Flood Insurance Act of 1968, as amended (42 U.S.C. 
Chap. 50), $75,000,000. 

Policy Development and Research 

research and technology 

For contracts, grants, and necessary expenses of programs of re- 
search and studies relating to housing and urban problems, not other- 
wise provided for, as authorized by title V of the Housing and Urban. 



113 



^401 APPROPRIATIONS ACTS 

Development Act of 1970, as amended (12 U.S.C. 1701z-l et seq.), 
includino- carrvinff out the functions of the Secretary under section 
1(a) (1) (i) of Keorganization Plan No. 2 of 1968, $55,000,000, to re- 
main available until September 30, 1978. 

Management and Administration 

SALARIES AND EXPENSES, DEPARTMENT OF HOUSING AND URBAN 

DEVELOPMENT 

For necessary administrative and nonadministrative expenses of the 
Department of Housing and Urban Development, not otherwise pro- 
vided for, including not to exceed $2,500 for official reception and 
representation expenses, $419,000,000, of which $223,630,000 shall 
be provided from the various funds of the Federal Housing 
Administration. 

FUNDS APPKOPEIATED TO THE PRESIDENT 
Federal Disaster Assistance Administration 

DISASTER relief 

For expenses necessary to carry out the functions of the Depart- 
ment of Housing and Urban Development under the Disaster Relief 
Act of 1970, as amended, the Disaster Relief Act of 1974, and Reorga- 
nization Plan No. 1 of 1973, authorizing assistance to States and local 
governments, $100,000,000, to remain available until expended: 
Provided^ That not to exceed 3 per centum of the foregoing amount 
shall be available for administrative expenses. 



TITLE III 
CORPORATIONS 

The following corporations and agencies, respectively, are hereby 
authorized to make such expenditures, within the limits of funds and 
JDorrowing authority available to each such corporation or agency and 
m accord with law, and to make such contracts and commitments 
without regard to fiscal year limitations as provided by section 104 of 
the Government Corporation Control Act, as amended, as may be 
necessary m carrying out the programs set forth in the budget for the 
current fiscal year for such corporation or agency except as herein- 
after provided. 



TITLE IV 
GENERAL PROVISIONS 

Sec. 4^1. Where appropriations in titles I and II of this Act are 
•expendable for travel expenses of employees and no specific limitation 



114 



APPROPRUTIONS ACTS §408 

has been placed thereon, the expenditures for such travel expenses 
may not exceed ten per centum above the amounts set forth therefor 
in the budget estimates submitted for the appropriations: Provided^ 
That this section shall not apply to travel performed by uncompen- 
sated officials of local boards and appeal boards of the Selective Serv- 
ice S3^stem; to travel performed directly in connection with care and 
treatment of medical beneficiaries of tlie Veterans Administration ; or 
to payments to interagency motor pools where separately set forth 
in the budget schedules : Provided further^ That the limitations may 
be increased by the Secretary when necessary to allow for travel per- 
formed by employees of the Department of Housing and Urban 
Development as a result of increased Federal Housing Administra- 
I tion inspection and appraisal workload. 

Sfx. 402. Appropriations and funds available for the administrative 
expenses of the Department of Housing and Urban Development and 
the Selective Service System shall be available in the current fiscal 
year for purchase of uniforms, or allowances therefor, as authorized 
by law (5 U.S.C. 5901-5902) ; hire of passenger motor vehicles; and 
services as authorized by 5 U.S.C. 3109. 

Sec. 403. Funds of the Department of Housing and Urban Develop- 
ment subject to the Government Corporation Control Act or section 
40:3 of the Housing Act of 1950 shall be available, without regard 
to the limitations on administrative expenses, for legal services on a 
contract or fee basis, and for utilizing and making payment for serv- 
ices and facilities of Federal National Mortgage Association, Govern- 
ment National Mortgage Association, Federal Home Loan Mortgage 
Corporation, Federal Financing Bank, Federal Reserve banks or any 
member thereof. Federal home loan banks, and any insured bank 
within the meaning of the Federal Deposit Insurance Corporation 
Act, as amended (12 U.S.C. 1811-1831). 

Sec. 404. None of the funds provided in this Act may be used for 
payment, through grants or contracts, to recipients that do not share 
in the cost of conducting research resulting from proposals for projects 
not specifically solicited by the Government : Provided^ That the extent 
of cost sharing by the recipient sliai! reelect the mutuality of interest 
of the grantee or contractor and the Government in the research. 

Sec. 405. No part of any appropriation contained in this Act shall 
remain available for obligation beyond the current fiscal year unless 
expressly so provided herein. 

Sec. 406. No part of the funds appropriated under this Act may be 
used by the Environmental Protection Agency to administer or pro- 
mulgate, directly or indirectly, any program to tax, limit or otherwise 
regulate parking that is not specificallv required pui-suant to subse- 
quent legislation. 

Sec. 407. None of the funds provided by this Act shall be used to 
deny or fail to act upon, on the basis of noise contours set forth in 
an Air Installation Compatible Use Zone Map. an otherwise accept- 
able application for Federal Housing Administration mortgage 
insurance in connection with construction ^ in an area zoned for resi- 
dential use in Merced County, California. 

Sec. 408. No funds appropriated by this Act may be expended— 

* So in original. 



115 



1408 APPROPRIATIONS ACTS 

(1) pursuant to a certification of an officer or employee of the 
United States unless— - ^ ^ 

(A) such certificate is accompanied by, or is part of a 
voucher or abstract which describes the payee or payees and 
the items or services for which such expenditure is being 

made, or , .^ 

(B) the expenditure of funds pursuant to such certifica- 
tion, and without such a voucher or abstract, is specifically 
authorized by law ; and 

(2) unless such exi)enditure is subject to audit by the General 
Accounting Office or is specifically exempt by law from such an 
audit. 

This Act may be cited as the "Department of Housing and Urban 
Development — Independent Agencies Appropriation Act, 1977". 
Approved August 9, 1976. 



EXCERPTS FROM DEPARTMENT OF HOUSING AND URBAN DEVELOP- 
MENT—INDEPENDENT AGENCIES APPROPRIATIONS ACT, 1976 

[Public Law 94-116, 89 Stat. 581] 

AN ACT Making appropriations for the Department of Housing and Urban De- 
velopment, and for sundry independent executive agencies, boards, bureaus, 
commissions, corporations, and oflSces for the fiscal year ending June 30, 1976, 
and the period ending September 30, 1976, and for other purposes. 

Be it enacted hy the Senate and House of Representatwes of the 
United States of America in Congress asserribled^ That the following 
sums are appropriated, out of any money in the Treasury not other- 
wise appropriated, for the Department of Housing and Urban Devel- 
opment, ' and for sundry independent executive agencies, boards, 
bureaus, commissions, corporations, and offices for the fiscal year end- 
ing June 30, 1976, the period ending September 30, 1976, and'for other ; 
purposes, namely : 

TITLE I 

DEPARTMENT OF HOUSING AND UEBAN 
DEVELOPMENT 

Housing Programs 

emergency homeowners' reliep fund 

For emergency mortgage relief payments and for other expenses 
of the Emergency Homeowners' Relief Fund, as authorized by title I 

^Q^nnnnnA"'^^^''''^. ^''''^.'^^ ^^*^ ^^ l^'^^ (Public Law 94-50), 
^^5,000,000, to remain available until September 30, 1976. 

STATE HOUSING FINANCE AND DEVELOPMENT AGENCIES 

For interest grant payments pursuant to section 802(c) (2) of the 
^5 0nnnno''^ Community Development Act of 1974 (88 Stat. 722), 
ti)15,000,000, to remam available until September 30, 1976: Provided, 



116 



APPROPRIATIONS ACTS 

That the total of contracts for annual payments entered into under 
such section shall not exceed $15,000,000 : Provided further^ That the 
total new budget authority obligated under such contracts entered 
into after June 30, 1975, shall not exceed $600,000,000. 

ANNUAL CONTRIBUTIONS FOR ASSISTED HOUSING 

The additional amount of contracts for annual contributions, not 
otherwise provided for, as authorized by section 5 of the United States 
Housing Act of 1937, as amended (42 U.S.C. 1437c), entered into 
after June 30, 1975, shall not exceed $662,300,000, which amount 
shall be in addition to balances of authorization heretofore made avail- 
able for such contracts : Provided^ That the total new budget authority 
obligated under such contracts entered into after June 30, 1975, shall 
not exceed $17,000,000,000, which amount shall not include budget 
authority obligated under balances of authorization heretofore made 
available: Provided further^ That at least $50,000,000 of the new con- 
tract authority herein made available shall be used only for contracts 
for annual contributions to assist in financing the development or 
acquisition of low-income housing projects to be owned by public 
housing agencies other than under section 8 of the above Act : Provided 
further^ That not less than 50 per centum of the funds made available 
by this Act which are used pursuant to section 8 of the above Act shall 
be allocated to contracts to make assistance payments with respect to 
newly constructed or substantially rehabilitated housing: ATid pro- 
vided further. That in fiscal year 1976 and the period ending Septem- 
ber 30, 1976, the fair market rent basis of contracts approved pursuant 
to section 8 of the above Act shall not exceed by more than 10 per 
centum in the aggregate, or 20 per centum in individual market 
areas, those published in the Federal Kegister through September 8, 
1975. 

RENT SUPPLEMENTAL, PROGRAM 

The limitation otherwise applicable to the maximum payments that 
may be required in any fiscal year by all contracts entered into under 
section 101 of the Housing and Urban Development Act of 1965 (12 
U.S.C. 1701s) is increased by $20,000,000. 

HOUSING FOR THE ELDERLY OR HANDICAPPED 

The limitation on the aggregate loans that may be made under 

section 202 of the Housing Act of 1959, as amended, from the fund 

authorized by subsection (a) (4) of such section, is hereby established 

for the fiscal year 1976 through the period ending September 30, 1976, 

at $375,000,000 in accordance with paragraph (C) of such subsection, 

which funds shall be available only to qualified nonprofit sponsors 

: for the purpose of providing 100 per centum loans for the development 

of housing for the elderly or handicapped, vrith any cash equity or 

other financial commitments imposed as a condition of loan approval to 

9 i be returned to the sponsor if sustaining occupancy is achieved in a 

, reasonable period of time: Provided^ That the full amount shall be 

!,!. available for permanent financing (including construction financing) 

for housing projects for the elderly or handicapped. 



117 



APPROPRIATIONS ACTS 
HOUSING PAYMENTS 

For the payment of annual contributions, not otherwise provided 
for, in accordance with section 5 of the United States Housing Act of 
1937, as amended (42 U.S.C. 143Tc) ; for payments authorized by 
title IV of the Housing Act of 1950, as amended (12 U.S.C. 1749 et 
seq.) ; for rent supplement payments authorized by section 101 of the 
Housing and Urban Development Act of 1965, as amended (12 U.S.C. 
1701s) ; and for payments as authorized by sections 235 and 236, of 
the National Housing Act, as amended (12 U.S.C. 1715z, 1715z-l), 
$2,245,000,000. 

For "Housinof payments" for the period July 1, 1976, through Sep- 
temper 30, 1976r$600,000,000. 

PAYMENTS FOR OPERATION OF LOW-INCOME HOUSING PROJECTS 

For annual contributions to public housing agencies for the pay- 
ment of operating subsidies for low-income housing projects as au- 
thorized by section 9 of the United States Housing Act of 1937, as 
amended (42 U.S.C. 1437g), $535,000,000: Provided, That the aggre- 
gate amount of contracts for annual contributions entered into for 
such payments shall not exceed $535,000,000. 

For "Payments for ooeration of low-income housing projects" for 
the period July 1, 1976, through September 30, 1976, $80,000,000: 
Provided, That the aggregate amount of contracts for such payments 
shall not exceed $80,000,000. 

SALARIES AND EXPENSES, HOUSING PROGRAMS 

For necessary administrative expenses, not otherwise provided for, 
and for nonadministrative expenses as classified by section 1 of the 
National Housing Act, as amended (12 U.S.C. 1701), in carrying out 
programs of housing production and mortgage credit and housing 
management, $199,000,000, of which $158,650,000 shall be provided by 
transfer from the various funds of the Federal Housing Administra- 
tion : Provided, That administrative expenses in connection with the 
Revolving fund (liquidating programs) shall be exclusive of expenses 
necessary in the case of defaulted obligations to protect the interests 
of the Government. 

For "Salaries and expenses, housing programs" for the period 
July 1, 1976, through September 30, 1976, $49,800,000, of which 
$39,850,000 shall be provided by transfer from the various funds of 
the Federal Housing Administration. 

Government National Mortgate Association 

EMERGENCY MORTGATE PURCHASE ASSISTANCE 

The total amount of purchases and commitments authorized to 
be nmde pursuant to section 313 of the National Housing Act, a^ 
amended (12 U.S.C. 1723e; 88 Stat. 1364; Public Law 94-50), shall 
not exceed $5,000,000,000 outstanding at any one time, which amount 



118 



APPROPRIATIONS ACTS 

shall be in addition to balances of authorization heretofore made 
available for purchases and commitments pursuant to said section 
and which shall continue available after October 18, 1975 : Provided^ 
That the Association may borrow from the Secretary of the Treasury 
in accordance with said section, in such amounts as are necessary to 
carry out the purposes and requirements of said section as author- 
ized herein. 

PAYMENT OF PARTICIPATION SALES INSUmCIENCIES 

For the payment of such insufficiencies as may be required by the 
Government National ^Mortgage Association, as trustee, on account 
! of outstanding beneficial interests or participations in assets of the 
I Department of Housing and Urban Development (including the Gov- 
I ernment National Mortgage Association) authorized by the Inde- 
pendent Offices and Department of Housing and Urban Development 
Appropriation Act, 1968, to be issued pursuant to section 302(c) of 
the Federal National Mortgage Association Charter Act, as amended, 
$20,935,000. 

For "Payment of participation sales insufficiencies" for the period 
July 1, 1976, through September 30, 1976, $5,291,000. 

Community Planning and Development 

rehabilitation loan fund 

1 For the revolvinc: fund established pursuant to section 312 of the 
I Housing Act of 1964, as amended (42 U.S.C. 1452b), $50,000,000, to 
remain available until August 22, 1976. 

COMIMUNITY development GRANTS AND TRANSFER OF TJNEXPENDED 

BALANCE 

For contracts with and payments to States and units of general 
local government and for related expenses, not otherwise provided for, 
necessary for carrying out a community development grant program 
as authorized bv Title I of the Housing and Community Development 
Act of 1974 (*P.L. 93-383. 88 Stat. 633), $2,700.0001000, of which 
$964,000,000 shall be derived by transfer from the unexpended balance 
of budget authoritv provided bv section 401(d)(1) of the Housing 
Act of 1950, as amended (12 U.S.C. 1749(d) (1) ), which shall be 
treated the same as other budget authority provided by this paragraph, 
to remain available until September 30, 1978. 

For grants to States and units of general local government, to be 
used only for expenses necessary for carrying out a community devel- 
opment grant program authorized by Section 106(d) C2) of '^ Title I 
of the Housinjr and Community Development Act of 1974, $52,000,000, 
to remain available until September 30, 1978. 

For grants to units of general local government for ursrent com- 
munity development needs pursuant to section 103(b) of Title T of 
the Housing and Community Development Act of 1974, $50,000,000, 
to i-emain available until September 30, 1978. 



119 



APPROPRIATIONS ACTS 
COMPREHENSIVE PLANNING GRANTS 

For comprehensive plaiming grants as authorized by section 701 of 
the Housing Act of 1954, as amended (40 U.S.C. 461), $75,000,000, 
to remain available until expended. 

SALARIES AND EXPENSES, COMMUNITY PLANNING AND DEVELOPMENT 

PROGRAMS 

For necessary administrative expenses of programs of community 
planning and development, not otherwise provided for, $41,740,000. 

For "Salaries and expenses, community planning and development 
programs" for the period July 1, 1976, through September 30, 1976, 
$10,500,000. 

Federal Insurance Administration 

FLOOD INSUPvANCE 

For necessary administrative expenses, not otherwise provided for,, 
in carrying out the National Flood Insurance Act of 1968, as amended 
(42 U.S.C. Chap. 50), $75,000,000. 

For "Flood insurance" for the period July 1, 1976, through Septem- 
ber 30, 1976, $18,750,000. 

Office of Interstate Land Sales Registration ! 

interstx\te land sales 

For necessary expenses of carrying out the Interstate Land Sales 
Full Disclosure Act (15 U.S.C. 1720), not otherwise provided for,. 
$2,726,000. 

For "Interstate land sales" for the period July 1, 1976, through 
September 30, 1976, $645,000. 

Policy Development and Research 

research and technology 

For contracts, grants, and necessary expenses of programs of 
research and studies relating to housing and urban problems, not other- 
wise provided for, as authorized by title V of the Housing and Urban 
Development Act of 1970, as amended, (12 U.S.C. 1701z-l et seq.), 
including carrying out the functions of the Secretary under section 
1(a) (l)(i) of Reorganization Plan No. 2 of 1968, $53,000,000. to 
remain available until September 30, 1977 : Provided, That $400,000 
of the foregoing amount shall be used only for a grant to the Housing 
Assistance Council : Provided further. That $1,000,000 of the foregoing 
amount shall be used only for mobile home construction and safety 
standard activities. 

For "Research and technology" for the period July 1, 1976, through 
September 30, 1976, $15,500,000, to remain available until Septem- 
ber 30, 1977. 



120 



APPROPRIATIONS ACTS 
SALARIES AND EXPENSES, POLICr DEVELOPMENT AND RESEARCH 

For necessary administrative expenses of programs of policy devel- 
opment and research, not otherwise provided for, $6,765,000. 

For "Salaries and expenses, policy development and research" for 
the period July 1, 1976, through September 30, 1976, $1,700,000. 

FAIR HOUSING AND EQUAL OPPORTUNITY 

For expenses necessary to carry out the functions of the Secretary 
pursuant to title VIII of the Civil Rights Act of 1968 (42 U.S.C. 
3601) , and other equal opportunity and fair housing programs author- 
ized by law, not otherwise provided for, $12,735,000. 

For "Fair housing and equal opportunity" for the period July 1, 
1976, through September 30, 1976, $3,265,000. 

Departmental Manageivient 

general departmental management 

For necessary administrative expenses of the Secretary, not other- 
wise provided for, in overall program planning and direction in the 
Department including not to exceed $2,500 for official reception and 
representation expenses, $5,905,000. 

For "General departmental management" for the period July 1, 
1976. through September 30, 1976, including not to exceed $625 for 
official reception and representation expenses, $1,510,000. 

SALARIES AND EXPENSES, OFFICE OF GENERAL COUNSEL 

For necessary exDenses of the Office of General Counsel, not other- 
wise provided for, ^$5,089,000, of which $1,750,000 shall be provided 
by transfer from the various funds of the Federal Housing Admin- 
istration, as provided by the National Housing Act (12 U.S.C. 1701). 

For "Salaries and expenses. Office of General Counsel" for the pe- 
riod July 1, 1976, through September 30, 1976, $1,319,000, of which 
$465,000 shall be provided by transfer from the various funds of the 
Federal Housing Administration, as provided by the National Hous- 
ing Act (12 U.S.C. 1701). 

SALARIES AND EXPENSES, OFFICE OF INSPECTOR GENERAL 

For necessarv expenses of the Office of Inspector General, not other- 
wise provided for, $10,280,000, of which $3,035,000 shall be provided 
by transfer from the various funds of the Federal Housing Admin- 
istration as provided by the National Housing Act (12 U.S.C. 1701). 

For "Salaries and expenses. Office of Inspector General" for the 
period July 1, 1976, through September 30, 1976, $2,615,000, of which 
$810,000 shall be provided by transfer from the various funds of the 
Federal Housing Administration, as provided by the National Hous- 
ing Act ( 12 U.S.C. 1701) . 



121 

45-70U 0-79-9 



APPROPRIATIONS ACTS 
ADMINISTRATION AND STAFF SERVICES 

For administrative expenses necessary in providing general admin- 
istration and staff services within the Department, not otherwise 
provided for, $53,125,000, of which $31,092,000 shall be provided by 
transfer from the various funds of the Federal Housing Administra- 
tion, as provided by the National Housing Act (12 U.S.C. ITOI). 

For "Administration and staff services" for the period July 1, 1976, 
through September 30, 1976, $12,803,000, of which $7,195,000 shall be 
provided by transfer from the various funds of the Federal Housing 
Administration, as provided by the National Housing Act (12 U.S.C. 
1701). 

REGIONAL MANAGEMENT AND SERVICES 

For necessary administrative expenses, not otherwise provided for, 
of management and program coordination in the regional offices of the 
Department, $40,500,000, of which $15,580,000 shall be provided by 
transfer from the various funds of the Federal Housing Administra- 
tion, as provided by the National Housing Act (12 U.S.C. 1701). 

For "Regional management and services" for the period July 1, 
1976, through September 30, 1976, $10,000,000, of which $3,905,000 
shall be provided by transfer from the various funds of the Federal 
Housing Administration, as provided by the National Housing Act 
(12 U.S.C. 1701). 

FUNDS APPROPRIATED TO THE PRESIDENT 

Federal Disaster Assistance Administration 

DISASTER relief 

For expenses necessary to carry out the functions of the Department 
of Housing and Urban Development under the Disaster Relief Act of 
1970, as amended, the Disaster Relief Act of 1974, and Reorganization 
Plan No. 1 of 1973, authorizing assistance to States and local govern- 
ments, $150,000,000, to remain available until expended: Provided^ 
That not to exceed 3 per centum of the foregoing amount shall be 
available for administrative expenses. 

For "Disaster relief" for the period July 1, 1976, through September 
30, 1976, $37,500,000, to remain available until expended: Provided^ 
That not to exceed 3 per centum of the foregoing amount shall be 
available for administrative expenses. 

TITLE II 

INDEPENDENT AGENCIES 



TITLE III 

CORPORATIONS 

The following corporations and agencies, respectively, are hereby 
authorized to make such expenditures, within the limits of funds and 



122 



APPROPRIATIONS ACTS §401 

borrowing authority available to each such corporation or agency and 
in accord with law, and to make such contracts and commitments 
without regard to fiscal year limitations as provided by section 104 of 
the Government Corporation Control Act, as amended, as may be 
necessary in carrying out the programs set forth in the budget for 
the current fiscal year for such corporation or agency except as here- 
inafter provided. 

Department of Housing and Urban Development 

limitation on administrative expenses, government national 
mortgage association 

Not to exceed $1,240,000 shall be available for administrative ex- 
penses, which shall be on an accrual basis, and shall be exclusive of 
interest paid, expenses (including expenses for fiscal agency services 
performed on a contract or fee basis) in connection with the issuance 
and servicing of securities, depreciation, properly capitalized expendi- 
tures, fees for servicing mortgages, expenses (including services per- 
formed on a force account, contract or fee basis, but not including 
other personal services) in connection with the acquisition, protection, 
operation, maintenance, improvement, or disposition of real or personal 
property belonging to said Association or in which it has an interest, 
cost of salaries, wages, travel, and other expenses of persons employed 
outside the continental United States, and all administrative expenses 
reimbursable from other Government agencies and from the Federal 
National Mortgage Association: Provided^ That the distribution of 
administrative expenses to the accounts of the Association shall be 
made in accordance with generally recognized accounting principles 
and practices. 

For the period July 1, 1976, through September 30, 1976, not to 
exceed $350,000 shall be available for administrative expenses. 



TITLE IV 
GENERAL PROVISIONS 

Sec. 401. Where appropriations in title I and II of this Act are 
expendable for travel expenses of employees and no specific limitation 
has been placed thereon, the expeditures for such travel expenses may 
not exceed ten per centum above the amounts set forth therefor in the 
budget estimates submitted for the appropriations: Provided^ That 
tliis section shall not apply to travel performed by uncompensated 
officials of local boards and appeal boards of the Selective Service 
System; to travel performed directly in connection with care and 
treatment of medical beneficiaries of the Veterans Administration; 
or to payments to interagency motor pools where separately set forth 
in the budget schedules: Provided further^ That the limitation may 
be increased by the Secretary when necessarv to allow for travel per- 
fomied by employees of the Department of Housing and Urban 
Development as a result of increased Federal Housing Administra- 
tion inspection and appraisal workload. 



123 



§402-§409 APPROPRIATIONS ACTS 

Sec. 402. Appropriations and funds available for the administra- 
tive expenses of the Department of Housing and Urban Development 
and the. Selective Service System shall be available in the current fiscal 
year for purchase of uniforms, or allowances therefor, as authorized 
by law (5 XJ.S.C. 5901-5902) ; hire of passenger motor vehicles; and 
services as authorized by 5 U.S.C. 3109. 

Sec. 403. Funds made available for the Department of Housing and 
Urban Development under title III of this Act shall be available, 
without regard to the limitations on administrative expenses, for 
legal services on a contract or fee basis, and for utilizing and making 
payment for services and facilities of Federal National Mortgage 
Association, Government National Mortgage Association, Federal 
Home Loan Mortgage Corporation, Federal Financing Bank, Federal 
Reserve banks or any member thereof. Federal home loan banks, and 
any insured bank within the meaning of the Federal Deposit Insurance 
Corporation Act, as amended (12 U.S.C. 1811-1831) . 

Sec. 404. None of the funds provided in this Act may be used for 
payment, through grants or contracts, to recipients that do not sliare 
in the cost of conducting research resulting from proposals for 
projects not specifically solicited by the Government : Provided^ That 
the extent of cost sharing by the recipient shall reflect the mutuality 
of interest of the grantee or contractor and the Government in the 
research. 

Sec. 405. No part of any appropriation, funds, or other authority 
contained in this Act shall be available for paying to the Administra- 
tor of the General Services Administration in excess of 90 per centum 
of the standard level user charge established pursuant to section 210 
(j) of the Federal Property and Administrative Services Act of 1949, 
as amended, for space and services. 

Sec. 406. No part of any appropriation contained in this Act shall 
remain available for obligation beyond the current fiscal year unless 
expressly so provided herein, except as provided in Section 204 of 
the Supplemental Appropriation Act, 1975 (P.L. 93-554). 

Sec. 407. No part of the funds appropriated under this Act may 
be used by the Environmental Protection Agency to administer or 
promulgate, directly or indirectly, any program to tax, limit or other- 
wise regulate parking that is not specifically required pursuant to 
subsequent legislation. 

Sec. 408. None of the fimds provided by this Act shall be used to 
deny or fail to act upon, on the basis of noise contours set forth in an 
Air Installation Compatible Use Zone Map, an otherwise acceptable 
application for Federal Housing Administration mortgage insurance 
in connection with construction m an area zoned for residential use in 
Merced County, California. 

Sec. 409. No funds appropriated by this Act may be expended — 
(1) pursuant to a certification of an oflSicer or employee of the 
United States unless — 

(A) such certification is accompanied by, or is part of, a" 
voucher or abstract which describes the payee or payees and 
the items or services for which such expenditure is being 
made, or 

(B) the expenditure of funds pursuant to such certifica- 
tion, and without such a voucher or abstract, is specifically 
authorized by law; and 



124 



APPROPRIATIONS ACTS §409 

(2) unless such expenditure is subject to audit by the General 
Accounting Office or is specifically exempt by law from such an 
audit. 
This Act may be cited as the "Department of Housing and Urban 
Development — Independent Agencies Appropriation Act, 1976". 
Approved October 17, 1975. 



AUTHORIZATION OF APPROPRIATIONS 

[Public Law 94-144 [H.R. 6692] ; Dec. 9, 1975] 

AN ACT To authorize appropriations for the period July 1, 1976, through 
September 30, 1976. 

Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled^ That there are 
authorized to be appropriated for the period July 1, 1976, through 
September 30, 1976, such sums as may be necessary to conduct pro- 
grams and activities for which funding was authorized on June 30, 
1976 : Provided^ That this Act shall not affect any other law author- 
izing appropriations for the period July 1, 1976, through September 30, 
1976. 

Approved December 9, 1975. 



EXCERPTS FROM SUPPLEMENTAL APPROPRIATIONS ACT, 1976 

[Public Law 94-157, 89 Stat. 826] 

AN ACT Making supplemental appropriations for the fiscal year ending June 30, 
1976, and the period ending September 30, 1976, and for other purposes. 

Be it enacted hy the Senate and House of Representatives of the 
United States of AmeAca in Congress assembled^ That the following 
sums are appropriated out of any money in the Treasury not other- 
wise appropriated to supply supplemental appropriations (this Act 
may be cited as the "Supplemental Appropriations Act, 1976") for 
the fiscal year ending June 30, 1976, and the period ending Septem- 
ber 30, 1976, and for other purposes, namely : 



CHAPTER II 

DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT 

Housing Programs 

federal housing administration fund 

For payment to cover actual losses sustained by the Special Risk 
Insurance Fund, $100,000,000; and for payment to cover actual losses 
under the General Insurance Fund from mortgages insured under 
section 221(d)(3) with below-market interest rates, ^2,500,000; tc 

125 



§201 APPROPRUTTONS ACTS 

remain available until expended, as authorized by the National Hous- 
ing Act, as amended (12 U.S.C. l7l5z-3; 12 U.S.C. 1T151). 

TITLE II 
GENERAL PROVISIONS 

Sec. 201. No part of any appropriation contained in this Act shall 
remain available for obligation beyond the current fiscal year unless 
expressly so provided herein, except as provided in section 204 of the 
Supplemental Appropriation Act, 1975 (Public Law 93-554). 

Sec. 202. No part of any appropriation, funds, or other authority 
contained in this Act shall be available for paying to the Adminis- 
trator of the General Services Administration in excess of 90 per 
centum of the standard level user charge established pursuant to sec- 
tion 210(j) of the Federal Property and Administrative Services Act 
of 1949, as amended, for space and services. 

Sec. 203. No part of the funds appropriated by this Act shall be 
used during the fiscal year ending June 30, 1976 to make food stamps 
available to any household, to the extent that the entitlement otherwise 
available to such household is attributable to an individual who : (i) 
has reached his eighteenth birthday; (ii) is enrolled in an institution 
of higher education; and (iii) is properly claimed as a dependent 
child for Federal income tax purposes by a taxpayer who is not a 
member of an eligible household. 

Sec. 205. (a) It is the sense of Congress that the President, through 
the Director of the Office of Management and Budget, shall take im- 
mediate steps to restrain the inflationary impact of Federal expendi- 
tures and to conserve the use of energy by ordering a reduction of 
Federal travel expenditures not to exceed 10 percent. 

(b) These steps shall include such provisions as are necessary to 
insure that such reductions are allocated so as not to disrupt the pro- 
vision of vital governmental services or the organized troop movement 
of military personnel. 

(c) The President is requested to submit to Congress, within 30 days 
of adoption of this section by the Senate and the House of Representa- 
tives a report outlining his actions. 

Approved December 18, 1975. 



EXCERPTS FROM SECOND SUPPLEMENTAL APPROPRUTION 

ACT, 1976 

[Public Law 94-303, 90 Stat. 597] 

AN ACT Making supplemental appropriations for the fiscal year ending June 30 ' 
1976, and the period ending September 30, 1976, and for other purposes 

Be it enacted hy the Senate and Home of Representatives of the 
United States of America in Congress assemUed^ That the following 
sums are appropriated out of any money in the Treasury not otherwise 
appropriated to supply supplemental appropriations (this Act may 



126 



APPROPRIATIONS ACTS 

be cited as the "Second Supplemental Appropriations Act, 1976") for 
the fiscal year ending June 30, 1976, and the period ending Septem- 
ber 30, 1976, and for other purposes, namely : 



TITLE I 



CHAPTER IV— DEPARTMENT OF HOUSING AND 
URBAN DEVELOPMENT 

Housing Programs 

housing for the elderly or handicapped 

The limitation on the aggregate loans that may be made through 
September 30, 1976, under section 202 of the Housing Act of 1959, as 
amended, is hereby increased by §375,000,000. 

MOBILE HOME STANDARDS PROGRAM 

For necessary expenses, not otherwise provided for, to carry out the 
National Mobile Home Construction and Safety Standards Act of 
1974 (42 U.S.C. 5401-5426), to remain available until September 30, 
1976, $1,000,000. 

FEDERAL HOUSING ADMINISTRATION FUND 

For reimbursement to the Federal Housing Administration Fund 
for losses incurred under the urban homesteading demonstration, 
$5,000,000, as authorized by Section 810 of the Housing and Com- 
munity Development Act of 1974 (12 U.S.C. i706e), to remain avail- 
able until September 30, 1977. 



TITLE II— INCREASED PAY COSTS FOR THE FISCAL 

YEAR 1976 

For additional amounts for appropriations for the fiscal year 1976, 
for increased pay costs authorized by or pursuant to law, as follows : 

DEPARTMENT OF HOUSING AND URBAN DE VELOPIVIENT 
(Including Transfer of Funds) 

Housing Programs 

"Salaries and expenses. Housing programs", $5,819,000, of which 
$4,853,000 shall be provided by transfer from the various funds of the 
Federal Housing Administration ; 

"Limitation on administrative expenses. Government National Mort- 
gage Association" (increase of $33,000 in the limitation on adminstra- 
tive expenses) ; 

127 



APPROPRIATIONS ACTS 
Community Planning and Development 

"Salaries and expenses, Community planning and development pro- 
grams!', $1,280,000 ; 

Office of Interstate Land Sales Registration 

"Interstate land sales", $71,000 ; 

Policy Development and Research 

"Salaries and expenses. Policy development and research", $190,000 ; 

Fair Housing and Equal Opportunity 

"Fair housing and equal opportunity", $372,000; 

Departmental Management 

"General departmental management", $133,000 ; 

"Salaries and expenses, Office of general counsel", $152,000, of which 
$50,000 shall be provided by transfer from the various fimds of the 
Federal Housing Administration ; 

"Salaries and expenses. Office of inspector general", $314,000, of 
which $97,000 shall be provided by^ transfer from the various funds of 
the Federal Housing Administration ; 

"Administration and staff services", $944,000, of which $633,000 
shall be provided by transfer from the various funds of the Federal 
Housing Administration ; 

"Regional management and services", $594,000, of which $62,000 
shall be provided by transfer from the various funds of the Federal 
Jlousing Administration ; 

* ♦ * 41 m 4t * 

TITLE III— INCREASED PAY COSTS FOR THE PERIOD 
JULY 1, 1976, THROUGH SEPTEMBER 30, 1976 

For additional amounts for appropriations for the period July 1, 
1976, through September 30, 1976, for increased pay costs authorized 
by or pursuant to law, as follows : 

« * * « ♦ • * 
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

(Including Transfer of Funds) 
Housing Programs 

"Salaries and expenses, Housing programs", $2,188,000, of which 
$1,771,000 shall be provided by transfer from the various funds of " 
the Federal Housing Administration; 

"Limitation on administrative expenses, Government National 
Mortgage Association" (increase of $12,000 in the limitation on 
administrative expenses) ; 



128 



APPROPRIATIONS ACTS §401 

CoMMUNiTT Planning and Development 

"Salaries and expenses, Community planning and development 
programs", $449,000; 

Office of Interstate Land Sales Registration 
"Interstate land sales", $23,000 ; 

Policy Development and Research 
"Salaries and expenses. Policy development and research", $68,000 ; 

Fair Housing and Equal Opportunity 
"Fair housing and equal opportunity", $134,000 ; 
Departmental ^Management 

"General departmental management", $47,000 ; 

"Salaries and expenses, Office of general counsel", $55,000, of which 
$19,000 shall be provided by transfer from the various funds of the 
Federal Housing Administration ; 

"Salaries and expenses, Office of inspector general", $112,000, of 
which $36,000 shall be provided by transfer from the various funds 
of the Federal Housing Administration ; 

"Administration and staff services", $335,000, of which $225,000 
shall be provided by transfer from the various funds of the Federal 
Housing Administration ; 

"Regional management and services", $200,000, of which $21,000 
shall be provided by transfer from the various funds of the Federal 
Housing Administration ; 

• *««**• 

TITLE IV 
GENERAL PROVISIONS 

Sec. 401. No part of any appropriation contained in this Act shall 
remain available for obligation beyond the current fiscal year unless 
expressly so provided herein, except as provided in section 204 of the 
Supplemental Appropriation Act, 1975 (P.L. 93-554) . 

Sec. 402. Except where specifically increased or decreased else- 
where in this Act, the restrictions contained within appropriations, 
or provisions affecting appropriations or other funds, available dur- 
ing the fiscal year 1976 and the period July 1, 1976, through Sep- 
tember 30, 1976, limiting the amounts which may be expended for 
personal services, or for purposes involving personal services, or 
amounts which may be transferred between appropriations or author- 
izations available for or involving such services, are hereby increased 
to the extent necessary to meet increased pay costs authorized by or 
pursuant to law. 

Approved June 1, 1976. 

129 



APPROPRIATIONS ACTS 

Excerpt From Second Supplemental Appropriations Act of 1978 ^ 

DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT 

Housing Programs 

rent supplement program 

The limitation otherwise applicable to the maximum payments that 
may be required by all contracts entered into under section 101 of the 
Housing and Urban Development Act of 1965 (12 U.S.C. 1701s) is 
increased by $24,300,000 : Provided^ That budget authority obligated 
under such contracts shall be limited to $24,300,000. 

* ***♦»• 

Management and Administration 

(INCLUDING transfer OF FUNDS) 

"Salaries and expenses, Department of Housing and Urban Devel- 
opment", $20,969,000, including not to exceed $500 for official recep- 
tion and representation expenses, of which $10,929,000 shall be pro- 
vided by transfer from the various funds of the Federal Housing 
Administration and $6,000,000 shall be provided by transfer from the 
appropriation for "Flood insurance" ; 

Excerpts From Department of Housing and Urban Development — 
Independent Agencies Appropriations Act, 1979 ^ 

Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled ^ That the following 
sums are appropriated, out of any money in the Treasury not other- 
wise appropriated, for the Department of Housing and Urban Devel- 
opment, and for sundry independent agencies, boards, commissions, 
corporations, and offices for the fiscal year ending September 30, 1979, 
and for other purposes, namely : 

TITLE I 

DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT 

Housing Programs 

annual contributions for assisted housing 

The amount of contracts for annual contributions, not otherwise 
provided for, as authorized by section 5 of the United States Housing 
Act of li937, as amended (42 U.S.C. 1437c), and heretofore approved 
in annual appropriations acts, is increased by $1,322,297,000 of which 
not more than $50,000,000 shall be for the modernization of existing 



1 Public Law 95-355, 92 Stat. 523, approved September 8, 1978. 
a Public Law 95-392, 92 Stat. 791, September 30, 1978. 



130 



APPROPRIATIONS ACTS 

low-income housing projects : Provided^ That budget authority obli- 
gated under such contracts shall be increased above amounts hereto- 
fore provided in annual appropriations acts by $24,395,848,000: 
Provided further^ That any balances of authorities remaining at the 
end of fiscal year 1978 shall be added to and merged with the authority 
provided herein and made subject only to terms and conditions of law 
applicable to authorizations becoming available in fiscal year 1979. 

HOUSING PAYMENTS 

For the payment of annual contributions, not otherwise provided 
for, in accordance with section 5 of the United States Housing Act of 
1937, as amended (42 U.S.C. 1437c) ; for payments authorized by title 
IV of the Housing Act of 1950, as amended (12 U.S.C. 1749 et seq.) ; 
for rent supplement payments authorized by section IjOl of the Hous- 
ing and Urban Development Act of 1965, as amended (12 U.S.C. 
1701s) ; for payments as authorized by sections 235 and 236, of the 
National Housing Act, as amended (12 U.S.C. I7l5z, I71i5z-1) ; and 
for payments as authorized by section 802 of the Housing and Com- 
munity Development Act of 1974 (42 U.S.C. 1440), $4,460,000,000. 

HOUSING FOR THE ELDERLY OR HANDICAPPED FUND 

The limitation on the aggregate loans that may be made under 
section 202 of the Housing Act of 1959, as amended (12 U.S.C. I701q), 
from the fund authorized by subsection (a) (4) of such section, is 
increased by $800,000,000, together with any portion of loan limitations 
established for fiscal years beginning after June 30, 1975 which was 
not administratively committed or which becomes uncommitted, in 
accordance with paragraph (C) of such subsection, which funds shall 
be available only to qualified nonprofit sponsors for the purpose of 
providing 100 per centum loans foi- the development of housing for 
the elderly or handicapped, witli any cash equity or other financial 
commitments imposed as a condition of loan approval to be returned 
to the sponsor if sustaining occupancy is achieved in a reasonable 
period of time : Provided^ That the full amount shall be available for 
permanent financing (including construction financing) for housing 
projects for the elderly or handicapped : Provided further^ That the 
Secretary may borroAv from the Secretary of the Treasury in such 
amounts as are necessary to provide the loans authorized herein : 
Provided further^ That, notwithstanding any other provision of law, 
the receipts and disbursements of the aforesaid fund shall be included 
in the totals of the Budget of the United States Government. 

CONGREGATE SERVICES PROGRAM 

For contracts with and payments to public housing agencies and 
nonprofit corporations for congregate service programs as authorized 
by the Congregate Housing Services Act of 1978, $10,000,000, to re- 
main available until September 30, 1984. 

PAYMENTS FOR OPERATION OF L0W-INC03IE HOUSING PROJECTS 

For payments to public housing agencies for operating subsidies for 
low-income housing projects as authorized by section 9 of the United 

131 



APPROPRIATIONS ACTS 

States Housing Act of 1937, as amended (42 U.S.C. 1437g), 
$727,000,000. 

TROUBLED PROJECTS OPERATING SUBSIDY 

For assistance payments to owners of eligible multifamily housing 
projects, in the program of operating subsidies for troubled multi- 
family housing projects under the Housing and Community Develop- 
ment Amendments of 1978, $74,000,000 together with any excess rental 
charges collected after September 30, 1977, to remain available until 
September 30, 1980. 

FEDERAL HOUSING ADMINISTRATION FUND 

For payment to cover losses, not otherwise provided for, sustained 
by the Special Risk Insurance Fund and the General Insurance Fund, 
$352,290,000, to remain available until expended, as authorized by the 
National Housing Act, as amended (12 tJ.S.C. 1715z-3(b) and 1735c 

COLLEGE HOUSING LOANS AND OTHER EXPENSES 

The aggregate amount of commitments for loans made from the 
fund established pursuant to title TV of the Housing Act of 1950, as 
amended (12 U.S.C. 1749), for the fiscal year 1979 shall not exceed 
the total of loan repayments and other income available during such 
period, less operating costs. 

Government National Mortgage Association 
emergency mortgage purchase assistance 

The aggregate amount of purchases and commitments authorized 
to be made pursuant to section 313 of the National Housing Act, as 
amended (12 U.S.C. I723e), out of recaptured Emergency Mortgage 
Purchase Assistance authority, is increased by $1,000,000,000. 

SPECIAL ASSISTANCE FUNCTIONS FUND 

The aggregate amount of purchases and commitments authorized 
to be made pursuant to section 305 of the National Housing Act, as 
amended (12 U.S.C. 1720), is further increased by $2,000,000,000, of 
which $1,500,000,000 may be out of recaptured Special Assistance 
PurchavSe authority. 

PAY.SIENT OF PARTICIPATION SALES INSUFFICIENCIES 

For the payment of such insufficiencies as may be required by the - 
Government National Mortgage Association as trustee, on account 
of outstanding beneficial interests or participations in assets of the 
Department of Housing and Urban Development (including the Gov- 
ernment National Mortgage Association) authorized by the Inde- 
pendent Offices and Department of Housing and Urban Development 
Appropriation Act, 1968, to be issued pursuant to section 302(c) of 
the Federal National Mortgage Association Charter Act, as amended 
(12 U.S.C. 1717), $20,477,000. 

132 



APPROPRIATIONS ACTS 

Community Plaxning and De'\t:lopment 
community development grants 

For grants to States and units of general local government and for 
related expenses, not otherwise provided for, necessary for carrying 
out a community development grant program as authorized by title I 
of the Housing and Community Development Act of 1974, as amended 
(412 U.S.C. 5301), $3,650,000,000, to remain available until 
September 30, 1981 : Provided , That not to exceed 20 per centum of 
any grant made pursuant to section 103(a) of title I of the Housing 
and Community Development Act of 1974, as amended, shall be ex- 
pended for "Planning and Management Development'' and "Admin- 
istration" as defined at 24 CFE §§ 570.205 and 570.206, respectively, 
promulgated bv the Department of Housing and Urban Development 
on March 1,1978. 

For grants to units of general local government pursuant to section 
103(b) of title I of the Housing and Communitv Development Act of 
1974, as amended (42 U.S.C. 5301), $100,000,000. to remain available 
until September 30, 1981. 

URBAN DEVELOPMENT ACTION GRANTS 

For grants pursuant to section 103(c) of title I of the Housing and 
Community Development Act of 1974, as amended (42 U.S.C. 5301), 
$400,000,000, to remain available until September 30, 1981. 

COMPREHENSIVE PLANNING GRANTS 

For grants as authorized by section 701 of the Housing Act of 1954, 
as amended (40 U.S.C. 461), $53,000,000, to remain available until 
expended. 

REHABILITATION LOAN FUND 

For the revolving fund established pursuant to section 312 of the 
Housing Act of 1964, as amended (42 U.S.C. 1452b), $230,000,000, 
which shall be merged with all unobligated funds previously appro- 
priated therefor, to remain available until expended : Provided^ That 
the aggregate amount of commitments for loans made from the fund 
for fiscal year 1979 shall not exceed the total of loan repayments, 
appropriations, and other income available during such period, less 
operating costs, which aggregate shall be augmented by any previously 
appropriated funds which would otherwise become unavailable after 
September 30, 1978. 

URBAN HOMESTEADING 

For reimbursement to the Federal Housing Administration Funds 
for losses incurred under the urban homesteading program (12 U.S.C. 
I706e), $20,000,000, to remain available until expended. 

Federal Insurance Administration 

FLOOD insurance 

For necessary expenses, not otherwise provided for, in carrying out 
the National Flood Insurance Act of 1968, as amended (42 U.S.C. 

4127), $85,000,000. 

133 



APPROPRIATIONS ACTS 

Neighborhoods, Voluntary Associations and Consumer Protection 

HOUSING counseling ASSISTANCE 

For contracts, grants, and other assistance, not otherwise provided 
for, for providing counseling and advice to tenants and homeowners — 
both current and prospective — with respect to property maintenance, 
financial management, and such other matters as may be appropriate 
to assist them in improving their housing conditions and meeting the 
responsibilities of tenancy or homeownershij), including provisions for 
training and for support of voluntary agencies and services as author- 
ized by section 106(a) (1) (iii) and section 106(a) (2) of the Housing 
and Urban Development Act of 1968, as amended, $9,000,000. 

Policy Development and Research 

research and technology 

For contracts, grants, and necessary expenses of programs of 
research and studies relating to housing and urban problems, not 
otherwise provided for, as authorized by title V of the Housing and 
Urban Development Act of 1970, as amended (12 U.S.C. I701z-1 et 
seq.), including carrying out the functions of the Secretary under 
section 1(a) (1) (i) of Reorganization Plan No. 2 of 1968, $57,500,000, 
to remain available until September 30, 1980. 

Management and Administration 

salaries and expenses, department of housing and urban 
. development ( including transfer of funds ) 

For necessary administrative and nonadministrative expenses of 
the Department of Housing and Urban Development, not otherwise 
provide for, including not to exceed $3,000 for official reception and 
representation expenses, $524,065,000, of which $250,255,000 shall be 
provided from the various funds of the Federal Housing 
Administration. 

FUNDS APPROPRIATED TO THE PRESIDENT 
Federal Disaster Assistance Administration 

DISASTER relief 

For necessary expenses in carrying out the functions of the Depart- 
ment of Housing and Urban Development under the Disaster Relief 
Act of 1970, as amended (42 U.S.C. 4401), the Disaster Relief Act of . 
1974, as amended (42 U.S.C. 5202), and Reorganization Plan No. l"" 
of 1973 (50 U.S.C 2271), authorizing assistance to States and local 
governments, $200,000,000, to remain available until expended: Pro- 
vided^ That not to exceed 3 per centum of the foregoing amount shall 
be available for administrative expenses. 



134 



APPROPRIATIONS ACTS 

TITLE III 
CORPORATIONS 

Corporations and agencies of the Department of Housing and 
Urban Development and the Federal Home Loan Bank Board which 
are subject to the Government Corporation Control Act, as amended, 
are hereby authorized to make such expenditures, within the limits of 
funds and borrowing authorit}^ available to each such corporation or 
agency and in accord with law, and to make such contracts and com- 
rnitments without regard to fiscal year limitations as provided by 
section lOi of the Act as may be necessary in carrying out the programs 
set forth in the budget for the current ffscal year for such corporation 
or agency except as hereinafter provided: Provided^ That collections 
of these corporations and agencies may be used for new loan or mort- 
gage purchase commitments only to the extent expressly provided for 
m this Act (unless such loans are in support of other forms of assist- 
ance provided for in this or prior appropriation Acts), except that 
this proviso shall not apply to the mortgage insurance or guaranty 
operations of these corporations, or where loans or mortgage purchases 
are necessary to protect the financial interest of the United States 
Government. 

Federal Home Loax Baxk Board 
LoriTATiox ox admixistrative axd xoxadmixistrative expexses, 

FEDER.VL HOME LOAX BAXK BOARD 

Xot to exceed a total of $17,793,000 shall be available for adminis- 
trative expenses of the Federal Home Loan Bank Board, which may 
procure services as authorized by 5 U.S.C. 8109, and contracts for such 
services with one organization may be renewed annually, and uniforms 
or allowances therefor in accordance with law (5 U.S.C. 5901-5902), 
and said amount shall be derived from funds available to the Federal 
Home Loan Bank Board, including those in the Federal Home Loan 
Bank Board revolving fund and receipts of the Board for the cur- 
rent fiscal year and prior fiscal years, and the Board may utilize and 
may make payment for services and facilities of the Federal home loan 
banks, the Federal Reserve banks, the Federal Savings and Loan 
Insurance Corporation, the Federal Home Loan ^lortgage Corpora- 
tion, and other agencies of the Government (including payment for 
ofKce space) : Provided. That all necessary expenses in connection with 
tlie conservatorship or liquidation of institutions insured by the Fed- 
eral Savings and Loan Insurance Corporation, liquidation or handling 
of assets of or derived from such insured institutions, payment of 
insurance, and action for or toward the avoidance, termination, or 
minimizing of losses in the case of such insured institutions, or activi- 
ties relating to section 5A(f ) or 6(i) of the Federal Home Loan Bank 
Act, section 5(d) of the Home Owners' Loan Act of 1933, section 
12(i) of the Securities Exchange Act of 1934, or section 406(c), 407, 
or 408 of the National Housing Act and all necessary expenses (in 
eluding services performed on a contract or fee basis, but not in- 
cluding other personal services) in connection with the handling, 
including the purchase, sale, and exchange, of securities on behalf of 
Federal home loan ba^ks, and the sale, issuance, and retirement of, or 

135 



§401 APPROPRIATIONS ACTS 

payment of interest on, debentures or bonds, under the Federal Home 
Loan Bank Act, as amended, shall be considered as nonadministrative 
expenses for the purposes hereon : Provided further^ That members and 
alternates of the Federal Savings and Loan Advisory Council shall 
be entitled to reimbursement from the Board as approved by the 
Board for transportation expenses incurred in attendance at meetings 
of or concerned with the work of such Council and may be paid in lieu 
of subsistence per diem not to exceed the dollar amount set forth in 
5 U.S.C. 5708: Provided further^ That expenses of any functions of 
supervision (except of Federal home loan banks) vested in or exer- 
cisable by the Board shall be considered as nonadministrative ex- 
penses: Provided further^ That not to exceed $500 shall be available 
for official reception and representation expenses : Provided further. 
That, notwithstanding any other provisions of this Act, except for 
the limitation in amount hereinbefore specified, the administrative 
expenses and other obligations of the Board shall be incurred, allowed, 
and paid in accordance with the provisions of the Federal Home Loan 
Bank Act of July 22, 1932, as amended (12 U.S.C. 1421-1449) : Pro- 
vided further. That the nonadministrative expenses (except such part 
as the Board determines not to be field expense, which part shall be 
treated as if expenses of supervision and examination were not as such 
excluded from administrative expense, and except those included in 
the first proviso hereof) for the supervision and examination of Fed- 
eral and State chartered institutions (other than special examinations 
determined by the Board to be necessary) shall not exceed $29,895,000. 

LIMITATION ON ADMINISTRATIVE EXPENSES, FEDERAL SAVINGS AND 
LOAN INSURANCE CORPORATION 

Not to exceed $950,000 shall be available for administrative ex- 
penses, which shall be on an accrual basis and shall be exclusive of 
interest paid, depreciation, property capitalized expenditures, ex- 
penses in connection with liquidation of insured institutions or 
activities relating: to section 406(c), 407, or 408 of the National Hous- 
ing Act, liquidation or handling of assets of or derived from insured 
institutions, payment of insurance, and action for or toward the avoid- 
ance, termination, or minimizing of losses in the case of insured insti- 
tutions, legal fees and expenses and payments for expenses of the 
Federal Home Loan Bank Board determined bv said Board to be 
properly allocable to said Corporation, and said Corporation may 
utilize and may make payments for services and facilities of the Fed- 
eral home loan banks, the Federal Reserve Banks, the Federal Home 
Loan Bank Board, the Federal Home Loan Morts^age Corporation, 
and other agencies of the Government : Provided, That, notwithstand- 
ing any other provisions of this Act, except for the limitation in 
amount hereinbefore specified, the administrative expenses and other 
obligations of said Corporation shall be incurred, allowed, and paid" 
in accordance with title IV of the Act of June 27, 1934, as amended 
(12 U.S.C. 1724-I730f). 

TITLE IV 

GENERAL PROVISIONS 

Sec. 401. Where appropriations in titles I and II of this Act are 
expendable for travel expenses of employees and no specific limitation 

136 



APPROPRIATIONS ACTS §402 

has been placed thereon, the expenditures for such travel expenses may 
not exceed the amounts set forth therefor in the budget estimates sub- 
mitted for the appropriations : Provided,, That this section shall not 
apply to travel performed by uncompensated officials of local boards 
and appeal boards of the Selective Service System; to travel per- 
formed directly in connection with care and treatment of medical 
beneficiaries of the Veterans Administration; or to payments to inter- 
agency motor pools where separately set forth in the budget schedules : 
Provided further^ That the limitations may be increased by the Secre- 
tary when necessary to allow for travel performed by employees of 
the Department of Housing and Urban Development as a result of 
increased Federal Housing Administration inspection and appraisal 
workload. 

Sec. 402. Appropriations and funds available for the administrative 
expenses of the Department of Housing and Urban Development and 
the Selective Service System shall be available in the current fiscal 
year for purchase of uniforms, or allowances therefor, as authorized 
by law (5 U.S.C. 5901-5902) ; hire of passenger motor vehicles; and 
services as authorized by 5 U.S.C. 8109. 

Sec. 403. Funds of the Department of Housing and Urban Develop- 
ment subject to the Government Corporation Control Act or section 
402 of the Housing Act of 1950 shall be available, without regard to 
the limitations on administrative expenses, for legal services on a 
contract or fee basis, and for utilizing and making payment for serv- 
ices and facilities of Federal National Mortgage Association, Govern- 
ment National Mortgage Association, Federal Home Loan Mortgage 
Corporation, Federal Financing Bank, Federal Reserve banks or any 
member thereof. Federal home loan banks, and any insured bank 
within the meaning of the Federal Deposit Insurance Corporation 
Act, as amended (12 U.S.C. 1811-1831). 

Sec. 404. No part of any appropriation contained in this Act shall 
remain available for obligation beyond the current fiscal year unless 
expressly so provided herein. 

Sec. 405. No funds appropriated by this Act may be expended — 

(1) pursuant to a certification of an officer or employee of the 
United States unless — 

(A) such certification is accompanied by, or is part of, a 
voucher or abstract which describes the payee or payees and 
the items or services for which such expenditure is being 
made, or 

(B) the expenditure of funds pursuant to such certifica- 
tion, and without such a voucher or abstract, is specifically 
authorized by law ; and 

(2) unless such expenditure is subject to audit by the General 
Accounting Office or is specifically exempt by law from such an 
audit. 

Sec. 406. None of the funds provided in this Act to any department 
or agency may be expended for the transportation of any officer or 
employee of such department or agency between his domicile and his 
place of employment, with the exception of the Secretary of the De- 
partment of Housing and Urban Development, who, under title 5, 
United States Code, section 101, is exempted from such limitations. 

Sec. 407. None of the funds provided in this Act may be used for 
payment, through grant's or contracts, to recipients that do not share 

137 



§ 502 MISCELLANEOUS ADMINISTRATIVE PROVISIONS 

in the cost of conducting research resulting from proposals for project^ 
not specifically solicited by the Government : Provided^ That the extenii 
of cost sharing by the recipient shall reflect the mutuality of interest 
of the grantee or contractor and the Government in the research. 

Sec. 408. None of the funds provided in this Act may be used, di | 
rectly or through grants, to pay or to provide reimbursement foil 
payment of the salary of a consultant (whether retained by the Fed | 
eral Government or a grantee) at more than the daily equivalent o.j 
the maximum rate paid for GS-18, unless specifically authorized hy 
law. 

' This Act may be cited as the "Department of Housing and Urbai 
Development— Independent Agencies Appropriation Act, 1979". 

Approved September 30, 1978. 

EXCERPTS FROM THE HOUSING ACT OP 1948 
[Public Law 901, 80th Cong^ 62 Stat. 1268, 1283 ; 12 U.S.C. 1701c] 

TITLE V— ADMINISTRATIVE AND MISCELLANEOUS 

PEOVISIONS 

ADMINISTRATIVE PROVISIONS 



Sec. 502. In carrying out their respective functions, powers, anc 
duties — 

(a) The Secretary of Housing and Urban Development may appoini 
such officers and employees as he may find necessary, which appoint- 
ments shall be subject to the civil service laws and the Classincatior 
Act of 1949, as amended. The Secretary may make such expendi- 
tures as may be necessary to carry out his functions, powers, and duties 
and there are hereby authorized to be appropriated to the Secre- 
tary, out of any moneys in the Treasury not otherwise appropriated 
such sums as may be necessary to carry out such functions, powers, and 
duties and for administrative expenses in connection therewith. 



(b) The United States Housing Authority may sue and be sued onlj 
with respect to its functions under the United States Housing Act oi 
1937, as amended, and title II of Public Law 671, Seventy-sixth Con- 
gress, approved June 28, 1940, as amended. Funds made available foi 
carrying out the functions, powers, and duties of the Authority (in 
eluding appropriations therefor, which are hereby authorized) shal 
be available, in such amounts as may from year to year be authorizec 
by the Congress, for the administrative expenses of the Authority 
Notwithstanding any other provisions of law except provisions oJ 
law hereafter enacted expressly in limitation hereof, the United States 
Housing Authority, or any State, or local public agency administering 
a low-rent housing project assisted pursuant to the United States 
Housing Act of 1937 or title II of Public Law 671, Seventy-sixtl 
Congress, approved June 28, 1940, shall continue to have the righi 
to maintain an action or proceeding to recover possession of any hous 
ing accommodations operated by it where such action is authorizec 

138 



MISCELLANEOUS ADMINISTRATIVE PROVISIONS §502 

by the statute or regulations under which such housing accommoda- 
tions are administered, and, in determining net income for the purposes 
of tenant eligibility with respect to low-rent housing projects assisted 
pursuant to said Acts, the tJnited States Housing Authority is au- 
thorized, where it finds such action equitable and in the public interest, 
" to exclude amounts or portions thereof paid by the United States 
[ Government for disability or death occurring in connection with 
f military service. 



(c) The Secretary of Housing and Urban Development and the 
Federal Home Loan Bank Board ^ (which term as used in this section 
shall also include and refer to the Federal Savings and Loan Insur- 
ance Corporation, the Home Owners' Loan Corporation, and the Chair- 
man of the Federal Home Loan Bank Board), respectively, may, in 
addition to and not in derogation of any powers and authorities con- 
ferred elsewhere in this Act — 

(1) with the consent of the agency or organization concerned, 
accept and utilize equipment, facilities, or the services of em- 
ployees of any State or local public agency or instrumentality, 
educational institution, or nonprofit agency or organization and, 
in connection with the utilization of such services, may make pay- 
ments for transportation while away from their homes or regular 
places of business and per diem in lieu of subsistence en route and 
at place of such service, in accordance with the provisions of 
section 73b-2 of title 5 ; 

(2) utilize, contract with, and act through, without regard to 
section 5 of title 41, any Federal, State, or local public agency 
or instrumentality, educational institution or nonprofit agency 
or organization with the consent of the agency or organization 
concerned, and any funds available to said officers for carry- 
ing out their respective functions, powers, and duties shall be 
available to reimburse or pay any such agency or organiza- 
tion; and, whenever in the judgment of any such officer neces- 
sary, he may make advance, progress, or other payments with 
respect to such contracts without regard to the provisions of sec- 
tion 529 of title 31 ; 

(3) make expenditures for all necessary expenses, including 
preparation, mounting, shipping, and installation of exhibits; 
purchase and exchange of technical apparatus; and such other 
expenses as may, from time to time, be found necessary in carrying 
out their respective functions, powers, and duties : Provided. That 
funds made available for administrative expenses in carrying out 
the functions, powers, and duties imposed upon the Secretary of 
Housing and Urban Development and the Federal Home Loan 
Bank Board, respectively, by or pursuant to law may at their 
option be consolidated into single administrative expense fund 
accounts of such officer or agency for expenditure by them, respec- 
tively, in accordance with the provisions hereof. 



1 The Home Loan Bank Board was removed from the Housing and Home Finance Agency 
effective August 11, 1955, bv* sec. 17(b) of the Federal Home Loan Bank Act, as 
amended by the Housing Amendments of 1955. 

139 



§601 MISCELLANEOUS ADMINISTRATIVE PROVISIONS 

((\)^ The Secretary of Kousin^r and Urban Deelopment may utilize 
funds made available to him for salaries and expenses for payment in 
advance for dues or fees for library memberships in organizations (or 
for membership of the individual librarians in organizations which 
will not accept library membership) whose publications are available 
to members only, or to members at a price lower than to the general 
public, and for payment in advance for publication available only 
upon that basis or available at a reduced price on prepublication order. 



Approved August 10, 1948. 

ADVISORY COMMITTEES 

EXCERPTS FROM HOUSING ACT OF 1949 

[Public Law 171, 81st Congress, 63 Stat. 413, 438; 12 U.S.C. 1701h] 

GENERAL AUTHORITT 

Sec. 601.2 The Secretary of Housinof and Urban Development is 
hereby authorized to establish such advisory committee or committees 
as he may deem necessary in carrying out any of his functions, powers, 
and duties under this or any other Act or authorization. Persons serv- 
ing without compensation as members of any such committee may be 
paid transportation expenses and not to exceed $25 per diem in lieu of 
subsistence, as authorized by section 5 of the Act of August 2, 1946 
(5 U.S.C. 73b-2). 

« « « * * • • 

Approved July 15, 1949. 



ADVISORY COMMITTEE— HOUSING FOR THE ELDERLY 

EXCERPTS FROM HOUSING ACT OF 1954 

[Public Law 1020, 84th Congress, 70 Stat. 1091, 1092; 12 U.S.C. 1701h-l] 

housing for the elderly 
Sec. 104. ♦ * *. 

* 41 « * « « « 

(d) The Secretary of Housing and Urban Development shall estab- 
lish, in accordance with the provisions of section 601 of the Housing 
Act of 1949, as amended, an advisory committee on matters relating to 
housing for elderly persons. 

* * « * * * • 

Approved August 7, 1956. 



1 Snhser. (6) added by section 909, Housing Act of 1961, Public r>aw 87-70. approved 
June JO, 1901, 75 Stat. 149, 192. 

^ Sec. 001 amended to authorize the appointment of advisory committees by the con- 
•tituent ajcendes by sec. 807 of the Housing Act of 1954, Public Law 560, 83d Congress, 
approved August 2, 1954, 68 Stat. 590. 645. 

140 



MISCELLANEOUS ADMINISTRATIVE PROVISIONS §811 

REDUCTION OF VULNERABILITY TO ATTACK 

EXCERPTS FROM HOUSING ACT OF 1954 
[Public Law 560, 83d Congress, 68 Stat. 590, 646; 12 U.S.C. 1701n] 

Sec. 811. The Department of Housing and Urban Development, and 
any other departments or agencies of the Federal Government having 
powers, fimctions, or duties with respect to housing under this or any 
other law shall exercise such powers, functions, or duties in such man- 
ner as, consistent with the requirements thereof, will facilitate prog- 
ress in the reduction of the vulnerability of congested urban areas to 
enemy attack. 

Approved August 2, 1954. 



ADMINISTRATION OF CERTAIN JOINTLY FUNDED 

PROJECTS 

Executive Order 11466 

[34 Fed. Reg. 6727] 

By virtue of the authority vested in me by section 612 of the 
Economic Opportunity Act of 1964, as amended (42 U.S.C. 2962), 
section 406 of the Juvenile Delinquency Prevention and Control Act 
of 1968 (42 U.S.C. 3886) and section 301 of title 3 of the United States 
Code, and as President of the United States, it is hereby ordered as 
follows : 

Sectiion 1. The Director of the Bureau of the Budget is authorized 
to designate, from time to time, projects for joint funding under sec- 
tion 612 of the Economic Opportunity Act of 1964, as amended (42 
U.S.C. 2962), and section 406 of the Juvenile Delinquency Prevention 
and Control Act of 1968 (42 U.S.C. 3886) . The Director of the Bureau 
of the Budget is also authorized to designate, or provide criteria for the 
designation of, one Federal agency to act for all participating agencies 
in administering any such jointly funded project. 

Sec. 2. Any Federal agency designated pursuant to section 1 of 
this order to administer any jointly funded project may waive any 
technical grant or contract requirement which is inconsistent with 
such agency's similar requirements or which such agency does not 
impose, except that no waiver of requirements may be made which 
(1) would materially affect or change the character or purpose of such 
project, or (2) does not have the concurrence of the agency which im- 
posed such requirement and advanced the funds for such project. 
For the purposes of this section, the term "technical grant or contract 
requirement^' means any requirement imposed by administrative reg- 
ulation or order. 

Seo. 3. The Director of the Bureau of the Budget is authorized to 
prescribe such additional regulations, not inconsistent with those pre- 
scribed herein, as he may deem necessary to implement section 612 of 
the Economic Opportunity Act of 1964, as amended, section 406 of the 
Juvenile Delinquency Prevention and Control Act of 1968, and this 
order. 



141 



§4 MISCELLANEOUS ADMINISTRATIVE PROVISIONS f 

i 

Sec. 4. In carrying out the provisions of this order, the Director of 
the Bureau of the Budget shall from time to time consult with thej 
participating Federal agencies as mav be appropriate. 

Sec. 6. Nothing in this order shall be deemed to limit or restrict any 
other authority which any Federal agency may possess by law, regula- 
tion, or order to initiate or participate in common or jointly funded 
projects, programs, activities, or fimctions. 

EiCHARD Nixon. 

The White House, April 18, 1969. 



RECORDS, SPECIFICATIONS AND AUDITS REQUIRED IN; 
CONNECTION WITH LOANS, ADVANCES, GRANTS OR 
CONTRIBUTIONS (BYRD AMENDMENT) 

EXCERPTS FROM HOUSING ACT OF 1954 

[Public Law 560, 83d Congress; 68 Stat. 590, 647; 12 U.S.C. 1701n] 

RECORDS 

Sec. 814. Every contract between the Department of Housing and 
Urban Development and any person or local body (including any cor- 
poration or public or private agency or body) for a loan, advance, 
grant, or contribution under the United States Housing Act of 1937, as 
amended, the Housing Act of 1949, as amended, or ^ any other other 
act shall provide that such person or local body shall keep such records 
as the Department of Housing and Urban Development shall from 
time to time prescribe, including records which permit a speedy and 
effective audit and will fully disclose the amount and disposition by 
such person or local body of the proceeds of the loan, advance, grant, 
or contribution, or any supplement thereto, the capital cost of any con- 
struction project for which any such loan, advance, grant, or contribu- 
tion is made, and the amount of any private or other non-Federal 
funds used or grants-in-aid made for or in connection with any such 
project. No mortgage covering new or rehabilitated multifamily hous- 
ing (as defined in section 227 of the National Housing Act, as 
amended) shall be insured unless the mortgagor certifies that he will 
keep such records as are prescribed by the Secretary of Housing and 
Urban Development at the time of the certification and that they will 
be kept in such form as to permit a speedy and effective audit. The De- 
partment of Housing and Urban Development and ^ the Comptroller] 
General of the United States shall have access to and the right to ex- 
amine and audit such records. This section shall become effective on the 
first day after the first full calendar month following tJie date of ap- 
proval of the Housing Act of 1961.^ 

APPLICANTS FOR ASSISTANCE REQUIRED TO SUBMIT SPECIFICATIONS 

Sec. 815. Repealed.* Every contract for a loan, grant, or contribu- 
tion under the United States Housing Act of 1937, as amended, or 

1 Sec. 908, Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 
192. Inserted "or any other Act." 

* Sec. 908, Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 
192, inserted "and the Comptroller General of the United States." 

3 Sec. 908, Housing Act of 1961. PubUc Law 87-70, approved June 30. 1961, 75 Stat 149. 
192, substituted "1961" for "1954." 

* Sec. 204 of the Housing and Community Development Act of 1974. Public Law 93-383. 
88 Stat. 633, approved August 22, 1974, repealed this section. 

142 



MISCELLANEOUS ADMINISTRATIVE PROVISIONS . § 816 

Of 

ie title I of the Housing Act of 1949, as amended, for the construction 
of a project shall require the submission of specifications with respect 
ly to such construction prior to the authorization for the award of the 
4. construction contract and the submission of data with respect to the 
^ acquisition of land prior to the authorization to acquire such land. 

AUDirS UNDER PUBLIC HOUSING ACT OF 19 37; COMPTROLLER GENERAL 

Sec. 816. Every contract for loans or annual contributions under 
\ the United States Housing Act of 1937, as amended, shall provide that 
^ the Secretary of Housing and Urban Development and the Comptrol- 
ler General of the United States, or any of their duly authorized repre- 
sentatives, shall, for the purpose of audit and examination, have access 
to any books, documents, papers, and records of the public housing 
agency entering into such contract that are pertinent to its operations 
with respect to financial assistance under the United States Housing 
Act of 1937, as amended. 
Approved August 2, 1954. 



PRESIDENrS FUNCTIONS DELEGATED TO HOUSING 
ADMINISTRATOR 

Executive Order 11196 
[30 Fed. Reg. 11711 

Providing for the Performance by the Housing and Home Finance 
Administrator of Certain Functions Vested in or Subject to 
THE Approval OF the President 

By virtue of the authority vested in me by Section 301 of Title 3 
of the United States Code, and as President of the United States, it is 
hereby ordered as follows — 

Section 1. The Housing and Home Finance Administrator is here- 
by designated and empowered to exercise, without the approval, ratifi- 
cation, or other action of the President, the following : 

(1) The authority vested in the President by Section 6(d) of the 
United States Housing Act of 1937, 50 Stat. 888 (42 U.S.C. 1406(d) ), 
to approve the undertaking by the Public Housing Administration of 
any annual contribution, grant, or loan, or any contract for any an- 
nual contribution, grant, or loan, under that Act. 

(2) The authority vested in the President by Section 14 of the 
United States Housing Act of 1937, 50 Stat. 895 (42 U.S.C. 1414), to 
approve the amending or superseding of any contract for annual con- 
tributions or loans, or both, so that the going Federal rate on the basis 
of which such annual contributions or the interest rate on the loans, or 
both, respectively, are fixed shall mean the going Federal rate on the 
date of approval of the amending or superseding contract entered into 
by the Public Housing Administration. 

(3) The authority vested in the Housing and Home Finance Ad- 
ministrator by Section 103(b) of the Housing Act of 1949, 63 Stat. 
416 (42 U.S.C. 1453(b) ), to contract, with the approval of the Presi- 
dent, to make grants under Title I of that Act. 

(4) The authoritv vested in the President by Title II of the Act of 

143 



s 



§2 MISCELLANEOUS ADMrniSTRATIVE PROVISIONS 

June 28 1940, ch. 440, 54 Stat. 681 (42 U.S.C. 1501-1505) , to determine 
that housing administered or assisted by the Public Housing Admin- 
istration under that Title is no longer needed to assure the availability 
of dwellings for persons engaged in national-defense activities : Pro- 
vided, That determinations under this paragraph shall require the con- 
currence of the Secretary of Defense. 

(5) The authority vested in the President by Section 5 of the Act of 
June 29, 1936, ch. 860, 49 Stat. 2026, to approve the dedication by the 
Public Housing Commissioner of streets, alleys, and parks for public 
use, and the granting by the Commissioner of easements, in connection 
with any low-cost housing or slum-clearance project described in that 
Act. 

(6) The authority vested in the President by Section 57 of the 
Alaska Omnibus Act (added by Public Law 88^51 of August 19, 
1964, 78 Stat. 507) , (A) to make the grants to the State of Alaska 
provided for in that Section, (B) to approve a plan submitted by the 

tate of Alaska for the implementation of the purpose of that Section, 
C) to specify reports to be made by the agency designated by the 
tate of Alaska in accordance with that Section and to prescribe 
the form of, and information to be contained in, such reports, and 
(D) to demand access to the records upon which such reports are 
based. 

Sec. 2. The following are hereby superseded : 

( 1 ) Part III of Executive Order No. 10530 of May 10, 1954. 

(2) Executive Order No. 10573 of October 26, 1954. 

( 3 ) Executive Order No. 10852 of November 27, 1959. 

(4) So much of Executive Order No. 11184 of October 13, 1964, as 
added paragraph (g) to Section 4 of Executive Order No. 10530 of: 
May 10, 1954. 

Sec. 3. (a) References in this Order to any statute or to any pro- 
vision of any statute shall be deemed to include (1) to the extent not 
inappropriate, references thereto as amended from time to time, (2) in 
the cases of Sections 1(1), 1(2), 1(4), and 1(5) of this Order, refer- 
ences to Reorganization Plan No. 3 of 1947 (61 Stat. 954), and (3) in 
the case of Section 1(5) of this Order, a reference to Executive Order 
No. 7732 of October 27,1937. 

(b) Unless inappropriate, any reference in anjr Executive order to 
any Executive order which is superseded by this Order, or to any 
Executive order provision so superseded, shall hereafter be deemed to 
refer to this Order or to the provision of Section 1 hereof, if any, 
which corresponds to the superseded provision. 

Sec. 4. All actions heretofore taken by the President or by his dele- 
gate in respect of the matters affected b;7 Section 1 of this Order and 
in force at the time of the issuance of this Order shall, except as the^ 
may be inconsistent with the provisions of this Order, remain in effeT^t 
until amended, modified, or revoked pursuant to the authority con- 
ferred by this Order unless sooner terminated by operation of law. 



Lyndon B. Johnson. 
The White House, February 2, 1965, 

144 



MISCELLANEOUS ADMINISTRATIVE PROVISIONS § 102 and § 612 

SPECIAL ASSISTANT COMMISSIONER FOR COOPERATIVE 

HOUSING ^ 

EXCERPTS FROM HOUSING AMENDMENTS OF 1955 

[Public Law 345, 84th Cong^ 69 Stat. 636; 12 U.S.a 1715e] 

Sec. 102. ♦ * * 

* * « * * * * 

(h) In the performance of, and with respect to, the functions, pow- 
ers, and duties vested in him by section 213 of the National Housing 
Act, section 221(d) (3), section 235,^ section 236, section 241, section 
243, section 246, and section 203 (n) of the National Housing Act, and 
section 101 of the Housing and Urban Development Act of 1965 or sec- 
tion 8 of the United States Housing Act of 1937^ (insofar as the 
provisions of such sections relate to cooperative housing) , the Secre- 
tary of Housing and Urban Development, notwithstanding the 
provisions of any other law, shall appoint a Special Assistant for 
Cooperative Housing, and provide the Special Assistant with adequate 
staff, whose sole responsibility will be to expedite operations under 
such sections and to eliminate obstacles to the full utilization of such 
sections under the direction and supervision of the Commissioner and 
Assistant Secretary for Housing Management.^ The person so ap- 
pointed shall be fully sympathetic with the purposes of such sections. 
« 4e « « * « * 

Approved August 11, 1955. 



EMPLOYEES PROHIBITED FROM STRIKING 

EXCERPTS FROM HOUSING ACT OF 1949 
[Public Law 171, 81st Cong., 63 Stat. 413, 438 ; 42 U.S.C. 1445 Rep.] 

GENERAL PROVISIONS 

Sec. 612. No part of any appropriation, loan, fund, or expendi- 
ture authorized by or provided pursuant to this Act, shall be used 
directly or indirectly to pay the salary or wages of any officer or 
employee of the Department of Housing and Urban Development or 
the Department of Agriculture who engages in a strike against the 
Government of the United States or who is a member of an organiza- 

lA provision In sec. 213(f) of the National Housing Act, as amended, authorizing the 
appohitment of an Assistant Commissioner for cooperative housing administration was 
deleted by sec. 120 of the Housing Act of 1954, Public Law 560, 83d Congress, approved 
Aueust 2, 1954, 68 Stat. 590, 596. ^he First Independent Offices Appropriation Act of 1954, 
Public Law 176, 83d Congress, approved July 31, 1953, 67 Stat. 298, 315, had previously 
provided that the position was no longer authorized. 

Sec. 1020(h), Demonstration Cities and Metropolitan Development Act of 1966, ap- 
proved November 3, 1966. 80 Stat. 1255, 1296, reenacted this section which in effect had 
been repealed by the Department of Housing and Urban Development Act. The 1966 Act 
also amended this section to add to the duties of the Special Assistant for Cooperative 
Housing, the cooperative housing programs under sec. 221(d)(3) of the National Housing 
Act, and cooperatives receiving rent supplements under sec. 101 of the Housing and 
Urban Development Act of 1965. . « . 

«Sec. 18(1) of the Housing Authorization Act of 1976, Public Daw 94-375, approved 
August 3, 1976. 90 Stat. 1067, amended section 102(h) of the Housing Amendments of 
19^^. by inserting after "section 221(d)(3)" a comma and the following : section 235, 
section 236, section 241. section 243. section 246. and section 203(n)"; sec. 18(2) further 
amended this section by inserting immediately after "Housing and Urban Develonment Act 
of 1965" the following: "or section 8 of the United States Housing Act of 1937 ; sec. 
18(3) further amended this section by inserting before the period "and Assistant Secre- 
tary for Housing Management". 

145 



^gl2 MISCELLANEOUS ADMINISTRATIVE PROVISIONS 

tion of Governnient employees that asserts the right to strike against 
the Government of the United States, or who advocates, or is a membei 
of an organization that advocates, the overthrow of the Government 
of the United States by force or violence: Provided, That for the 
purposes hereof an affidavit shall be considered prima facie evidence 
that the officer or employee making the affidavit has not contrary tc 
the provisions of this section engaged in a strike against the Gov- 
ernment of the United States, is not a member of an organization ol 
Government employees that asserts the right to strike against th( 
Government of the United States, or that such officer or employee does 
not advocate, and is not a member of an organization that advocates 
the overthrow of the Government of the United States by force oi 
violence : Provided further. That any person who engages in a strik< 
against the Government of the United States or who is a membe- 
of an organization of Government employees that asserts the right t( 
strike against the Government of the United States, or who advocates 
or who is a member of an organization that advocates, the overthrov 
of the Government of the United States by force or violence anc 
accepts an office or employment in the Department of Housing anc 
Urban Development or the Department of Agriculture the salary o: 
wages for which are paid from any appropriation, loan, fund, o 
expenditure authorized by or provided pursuant to this Act shal 
be guilty of a felony and, upon conviction, shall be fined not mor' 
than $1,000 or imprisoned for not more than one year, or both : Pro 
vided further, That the above penalty clause shall be in addition tc 
and not in substitution for, any other provisions of existing law. 

« » ♦ :|c ♦ ♦ « 

Approved July 15, 1949. 



PROVIDING THAT CERTAIN OFFICERS MAY ACT AS SEC 
RETARY OF HOUSING AND URBAN DEVELOPMENT 

Executive Order 11274 

[31 Fed. Reg. 5243] 

By virtue of the authority vested in me by Section 179 of th 
Revised Statutes (5 U.S.C. 6) and Section 301 of Title 3 of the Unite. 
States Code, and as President of the United States, it is ordered a 
follows : 

1. In the event of a vacancy in the Office of the Secretary of Housin,, 
and Urban Development or during the absence or disability of th 
Secretary, the Under Secretary shall act as Secretary of Plousing an'j 
Urban Development. | 

2. During any period when, by reason of absence, disability, o' 
vacancy in office, neither the Secretary nor the Under Secretary i 
available to exercise the powei'S or perform the duties of the Offic 
of the Secretary, an Assistant Secretary or the General Counsel, 
such order as the Secretary may from time to time prescribe, shall ac 
as Secretary of Housing and Urban Development. If no such orde 
of succession is in eifect at that time, then they shall act in the orde 
in which they shall have taken office as Assistant Secretaries or Gei 
eral Coimsel. 

_^ „^ ^^ Lyndon B. Johnson. 

The White House, March 30^ 1966. 

146 



MISCELLANEOUS ADMINISTRATIVE PROVISIONS §2 

ACCESSIBILITY TO PHYSICALLY HANDICAPPED 

[Public Law 90-480, 82 Stat. 718 ; 42 U.S.C. 4151] 

[an act To insnre that certain buildings financed with Federal funds are so 
designed and constructed as to be accessible to the physically handicapped. 

• Be it enacted hy the Senate and Hcmse of Representatives of the 
■ United States of America in Congress assembled^ That,^ as used in this 
•Act, the term "building" means any building or facility (other than 
I (A) a privately owned residential structure^ not leased by the Gov- 
.ernment for subsidized housing programs and (B) any building or 
facility on a military installation designed and constructed primarily 
■for use by able bodied military^ personnel) the intended use for which 
either will require that such building or facility be accessible to the 
[public, or may result in the employment or residence therein of physi- 
^cally handicapped persons, which building or facility is — 

(1) to be constructed or altered by or on behalf of the United 
I States; 

! (2) to be leased in whole or in part by the United States after 

the date of enactment of this Act ; ^ 

(3) to be financed in whole or in part by a grant or a loan made 
I by the United States after the date of enactment of this Act if such 
building or facility is subject to standards for design, construc- 
tion, or alteration issued under authority of the law authorizing 
such grant or loan ; or ^ 

(4)^ to be constructed under authority of the National Capital 
Transport.ation Act of 1060. the Xational Capital Transportation 
Act of 1965, or title III of the "Washington Metropolitan Area 
; Transit Regulation Compact. 

! Sec. 2.* The Administrator of General Services, in consultation with 
'the SecretaiT of Ilealtli, Education, and Welfare, shall prescribe such 
standards for \]\^. design, construction, and alteration of buildings 
(otlier than residential sti-uctures subject to this Act and buildings, 
structures, and facilities of the Department of Defense and of the 
United States Post-al Service subject to this Act) to insure whenever 
^possible that physic<qlly handicapped persons will have ready a>ccess to, 
■and use of, such buildings. 

j Sec. S.'* The Secretaiy of Housing and Urban Development, in con- 
sultation with the Secretary of Health, Education, and Welfare, shall 
prescribe standards for the design, construction, and alteration of 
|buildings whicli are residential structures subje<^t to this Act to insure 
whenever possible tliat physically handicapped persons will have ready 
'access to, and use of sucli buildings. 

j Sec. 4.^ The Secretary of Defense, in consultation with the Se^retarA^ 
of Health, Education, and Welfare, shall prescribe such standards for 
the design, constniction, and alteration of buildings, structures, and 
^facilities of the Department of Defense subject to this Act to insure 



■ 1 See excPH^t from Public Buildinsrs Cooperative Use Act of 1976, Public Law 94-541. 
Iipproved October IS. 1976. which follows this Act. 

, a Sec. 201 of Public Buildlnps Cooperative Use Act of 1976. Public Law 94-541, approved 
October IS. 1976. 90 Stat. 2505, amended this Act by insertinff "not leased by the Gov- 
,?rnment for subsidized Plousinp programs" in the first parajjraph and by striking out in 
'tarafrraph (2) the following: "after construction or alteration in accordance with plans 
inr) specifications of the United States". _ .^ - 

' "An amendment to the accessibility to Physically Handicapped Act," Public Law 91- 
205. approved March 5. 1977, 84* Stat. 49 amended this Act as set forth in the text. 

* Amended as set forth in the text bv Public Buildings Cooperative Use Act of 1976, 
Public Law 94-541. approved October 18. 1976. 

147 



§ 4 and 202 MISCELLANEOUS ADMINISTRATIVE PROVISIONS 

whenever possible that physically handicapped persons will have 
reiady access to, and use of, such buildings. 

Sec. 4a.^ The United States Postal Service, in consultation with the 
Secretary of Health, Education, and Welfare, shall prescribe such 
standards for the design, construction, and alteration of its buildings 
to insure whenever possible that physically handicapped persons will 
have ready access to, and use of, such buildings. 

Sec. 5. Every building designed, constructed, or altered after the 
effective date of a standard issued under this Act which is applicable 
to such building, shall be designed, constructed, or altered in accord- 
ance with such standard. 

Sec. 6.^ The Administrator of General Services, with respect to 
standards issued under section 2 of this Act, and the Secretary of 
Housing and Urban Development, with respect to standards issued! 
under section 3 of this Act, and the Secretary of Defense with respect 
to standards issued under section 4 of this Act, and the United States 
Postal Service with respect to standards issued under section 4a of this 
Act"— 

(1) to modify or waive any such standard, on a case-by-case 
basis, upon application made by the head of the department 
agency, or instrumentality of the United States concerned, and 
upon a determination by the Administrator or Secretary, as the 
case may be, that such modification or waiver is clearly necessary, 
and 

(2) shall establish a system of continuing surveys and investi- 
gations to insure compliance with such standards, to conduct such 
surveys and investigations as he deems necessary to insure com- 
pliance with such standards. 

Sec. 7.2 (a) The Administrator of General Services shall report tc 
Congress during the first week of January of each year on his activi- 
ties and those of other departments, agencies, and instrumentalities oi 
the Federal Government under this Act during the preceding fiscal 
year including, but not limited to, standards issued, revised, amended 
or repealed under this Act and all case-by-case modifications, anc 
waivers of such standards during such year. 

(b) The Architectural and Transportation Barriers Compliance 
Board established by section 502 of the Kehabilitation Act of 197: 
(Public Law 93-112) shall report to the Public Works and Transpor 
tation Committee of the House of Kepresentatives and the Public 
Works Committee of the Senate during the first week of January o 
each year on its activities and actions to insure compliance with th< 
standards prescribed under this Act. 

Approved August 12, 1968. 



EXCERPT FROM THE PUBLIC BUILDINGS COOPERATIVl 

USE ACT OF 1976 

[Public Law 94-541, 95th Congress] 

* * * * * ♦ * i 

Sec. 202. The amendment made by paragraph (1) of section 201 o! 

this Act sh all not apply to any lease entered into before January 1 

Pu;^?rar9i-^54\^^'pTovidS'ctol^er\^^r7t"' ^""'""^^ Cooperative Use Act of 197. 
94lfir alprVve^d Octobe^/llfme^""^'' Buildings Cooperative Use Act of 1976. Public La , 

148 



MISCELLANEOUS ADMINTSTRATIVE PROVISIONS §101 

1977. It shall apply to every lease entered into on or after January 1, 
1977, including any renewal of a lease entered into before such date 
which renewal is on or after such date. 

* 4e « * m m 

Approved October 18, 1976. 



ASSIGNING EMERGENCY PREPAREDNESS FUNCTIONS 
TO THE DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT 

EXCERPTS FROM EXECUTIVE ORDER NO. 11490 

[34 Fed. Reg. 17567] 
* ♦ ♦ * * * * 



PART 1— PURPOSE AND SCOPE 



Section 101. Purpose. This order consolidates the assignment of 
Jj emergency preparedness functions to various departments and agen- 
cies heretofore contained in the 21 Executive orders and 2 Defense 
'^Mobilization ordei-s listed in Section 3015 of this order. Assignments 
-have been adjusted to conform to changes in organization which have 
. occurred subsequent to the issuance of those Executive orders and De- 
!" fense Mobilization ordei-s. 

^: Sec. 102 Scope, (a) This order is concerned with the emergency 
^■'national planning and preparedness functions of the several depart- 
t ments and agencies of the Federal Government which complement the 
^'^ military readiness planning responsibilities of the Department of 
'"; Defense ; together, these measures provide the basic foundation for our 
^^overall national preparedness posture, and are f midamental to our abil- 
^ity to survive. The activities undertaken by the departments and agen- 
^fcies pursuant to this order, except as provided in Section 3003, shall 
■^he, in accordance with guidance provided by, and subject to evaluation 
by, the Administrator of General Services who has established within 
:«the General Services Administration a subordinate agency, the Fed- 
ileral Preparedness Agency, to assume those functions of the former 
r-Office of Emergency Preparedness transferred to the Administrator 
ii^of General Services by Section 3 of Executive Order 11725 of Jirne 27, 
0111973.^ 

iie (b) The departments and agencies of the Federal Government are 
hereby severally charged with the duty of assuring the continuity of 
the Federal Government in any national emergency type situation that 
might confront the nation. To this end, each department and agency 
with essential functions, whether expressly identical in this order 
^OT not, shall develop such plans and take such actions, including but 
not limited to those specified in this order, as may be necessary to 
assure that it will be able to perfonn its essential functions, and con- 
tinue as a viable part of the Federal Government, during any emer- 
gency that might conceivably occur. These include plans for maintain- 
%g the continuity of essential functions of the department or agency 
at the seat of government and elsewhere, through programs concerned 



^The second sentence of sec. 102(a) waa added by Executive Order No. 11921 dated 
itJune 11, 1976. 

149 



§ 1203 MISCELLANEOUS ADMINISTRATIVE PBOViaXONS 

with: (1) succession to office ; (2) predelegation of emergency author- 
ity; (3) safekeeping of essential records; (4) emergency relocation 
sites supported by communications and required services; (5) emer- 
gency action steps; (6) alternate headquarters or command facilities; 
and (7) protection of Government resources, facilities, and personnel. 
The continuity of Government activities undertaken by the depart- 
ments and agencies shall be in accordance with guidance provided by, 
and subject to evaluation by, the Director of the Federal Preparedness 
Agency (GSA).^ 

(c) ^ In addition to the activities indicated above, the heads of 
departments and agencies described in Parts 2 through 29 of this 
order shall: (1) prepare national emergency plans, develop prepared- 
ness programs, and attain an appropriate state of readiness with re- 
spect to the fimctions assigned to them in this order for all conditions 
of national emergency; (2) give appropriate consideration to emer- 
gency preparedness factors in the conduct of the regular functions of 
their agencies, particularly those functions considered essential in 
time of emergency, and (3) be prepared to implement, in the event 
of an emergency, all appropriate plans developed under this order. 



PART 12— DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT 

Section 1201. Resume or Responsibiij:ties. The Secretary of Hous- 
ing and Urban Development shall prepare national emergency plans 
and develop preparedness programs covering all aspects of housing, 
community facilities related to housing, and urban development (ex- 
cept that housing assets under the jurisdiction and control of the 
Department of Defense, other than those leased for terms not in 
excess of one year, shall be and remain the responsibility of the De- 
partment of Defense). 

Sec. 1202. Definition. As used in this part : 

(1) "Emergency housing" means any and all types of accommoda- 
tions used as dwellings in an emergency. 

(2) "Community facilities related to housing" means installations 
necessary to furnish water, sewer, electric, and gas services between 
the housing unit or project and the nearest practical source or servicing 
point. 

(3) "Urban development" means the building or restoration of ur- 
ban community, suburban, and metropolitan areas (except transporta- 
tion facilities) . 

Sec. 1203. Housing and Community Facilities Functions. The Secre- 
tary of Housing and Urban Development shall : 

(1) New housing. Develop plans for the emergency construction and 
manag:ement of new housins: and the communitv facilities related 



1 Executive Order No. 11921 dated June 11, 1976, deleted the words "Office of Emer^ 
gencv Preparedness" and substituted therefor the words "Federal Preparedness Ageucy 
(GSA)." 

* Executive Order No. 11921 dated June 11, 1976, added a new paragraph "(c)". 



150 



MISCELLANEOUS ADMINISTRATIVE PROVISIONS §1205 

thereto to the extent that it is determined that it may be necessary to 
provide for such construction and management with public funds and 
through direct Federal action, and to the extent that such construc- 
tion of new housing may have to be provided through Federal financial 
or credit assistance. 

( 2) Community facilities. Develop plans to restore community facili- 
ties related to housing affected by an emergency through the repair of 
damage, the construction of new facilities, and the use of alternate or 
back-up facilities. 

Sfx. 1204. Urban Development Functions. The Secretary of Housing 
and Urban Development shall : 

(1) Regional cooperation. Encourage regional emergency planning 
and cooperation among State and local governments with respect to 
problems of housing and metropolitan development. 

(2) Vulnerahility and redevelopment. In cooperation with the Fed- 
eral Preparedness Agency (GSA) ,^ develop criteria and provide guid- 
anr-e for the design and location of housing and community facilities 
related to housing to minimize the risk of loss under various emer- 

ncy situations. Develop criteria for determining which areas 
slionld be redeveloped in the event of loss or severe damage resulting 
from emergencies. 

Sec. 1205. Civil Defense Functions. In consonance with national 
civil defense plans, programs, and operations of the Department of 
Defense under Executive Order No. 10952, the Secretary of Housing 
and Urban Development shall : 

(1) Transitional activities. Develop plans for the orderly transfer 
of people from fallout shelters and from billets to temporary or per- 
manent liousing including advice and guidance for State and local 
;:^overnment agencies in the administration thereof. These plans shall 
be coordinated with national plans and guidance for emergency wel- 
fare services of the Department of Health, Education, and Welfare. 

(2) Temporary housing. Develop plans for the emergency repair 
and restoration for use of damaged housing, for the construction and 
management of emergency housing units and community facilities 
related thereto, for the emergency use of tents and trailers, and for the 
emergency conversion for dwelling use of non-residential structures, 
such activities to be financed with public funds through direct Federal 
action or through financial or credit assistance. 

(3) Shelter. In conformity with national shelter policy, assist in the 
development of plans to encourage the construction of shelters for 
both old and new housing, and develop administrative procedures to 
encourage the use of low-cost design and construction techniques to 
maximize protection in connection with national programs. 

♦ * ♦ 4e * ♦ ♦ 

EicHARD Nixon. 
The White House, October 28, 1969. 



Executive Order No. 11921 dated June 11, 1976, deleted the words "Office of Emer- 
cencv Preparedness" and substituted therefor the words "Federal Preparedness Agency 
(GSA)." 



151 



§ 1 MISCELLANEOUS ADMINISTRATIVE PROVISIONS 

DEFENSE ECONOMIC ADJUSTMENT PROGRAMS 

Executive Order 12049 

[43 Fed. Reg. 13363] 

By virtue of the authority vested in me as President by the Con 
stitution oi the United States of America, in order to provide co 
ordinated Federal economic adjustment assistance necessitated bj 
changes in Department of Defense activities, it is hereby ordered a: 
follows : 

Sectiox 1. Functions of the Secretary of Defense. 

(a) The Secretary shall, through the Economic Adjustment Com 
mittee, design and establish an Economic Adjustment Program to as 
sist in the alleviation of serious economic and social impacts that resul; 
from major Defense realignments. The program shall provide for : 

1. Identification of Defense-related impact problems of State 
metropolitan areas, or communities that require assistance. 

2. Preparation of development strategies and action plans to coi 
ordinate Federal, State and local economic adjustment efforts. 

3. Strengthened and uniform economic impact analysis and analysi; 
of community requirements for Federal economic adjustment resources 
prior to base realignment action. 

4. Timely and earliest possible consultation and cooperation wit] 
local. State and Federal officials concerning impact problems and co 
ordinated interagency and intergovernmental adjustment assistance. 

5. A clearinghouse service to exchange information among Federal 
State and local officials involved in the resolution of community ad 
justment problems; e.g., previous studies, technical information, an< 
sources of public and private financing. 

6. Application of consistent policies, practices, and procedures in th 
administration of Federal programs that are utilized to assist Defens 
impact conununities. 

7. Encouragement of effective State and regional cooperation an( 
concerted involvement of public interest groups and private secto 
organizations in Defense adjustment activities. 

8. Development, with representatives of appropriate agencies, o 
uniform criteria for the determination of social economic impact of 
particular realignment. 

9. Identification and strengthening of existing agency mechanisms t 
better coordinate employment opportunities for displaced agency pei 
sonnel. 

10. Increased attractiveness to the private sector of interim usage o 
lands and buildings and ways of streamlining property disposal pre 
cedures to enable impacted communities to acquire base property fo 
job-generation purposes as military activities phase down. 

(b) The Secretary of Defense shall ensure that sufficient resource 
and personnel are allocated to carry out these functions. 

Sec. 2. Economic Adjustment CommAttee. (a) The Economic Ad 
justment Committee is hereby continued. 

(b) The Committee shall h^ composed of the following, or a princi 



152 



MISCELLANEOUS ADMINISTRATIVE PROVISIONS §3 

pal deputy, and such others as the President may desisfnate : 

(1) The Secretary of Defense, who shall be the Chairman of the 
Committee. 

(2) The Secretary of Agriculture. 

(3) The Secretary of Commerce. 
(4^ The Secretary of Energy. 

(5) The Secretary of Health, Education, and Welfare. 

(6) The Secretary of Housing and Urban Development. 

(7) The Secretary of the Interior. 

(8) The Secretary of Labor. 

(9) The Secretarv of Transportation. 

(10) The Attorney General. 

(11) The Chairman, Council of Economic Advisers. 

(12) The Director of the Office of Management and Budget. 

(13) The Director of the United States Arms Control and Disarma- 
ment Agency. 

(14) The Administrator of the Environment Protection Agency. 

(15) The Director of the Community Services Administration. 

(16) The Administrator of General Services. 

(17) The Administrator of the Small Business Administration. 

(18) The Chairman of the United States Civil Service Commission. 

(c) The Committee shall advise, assist, and support the Secretary of 
Defense's Economic Adjustment activities. 

(d) The Secretary^ of Defense shall provide all necessary adminis- 
trative support for the Committee. 

Seo. 3. Respon.sihilit}/ of Executive Agencies. 

(a) The head of each agency represented on the Economic Adjust- 
ment Committee shall designate a permanent representative to: (1) 
serve as liaison with the Secretary of Defense's economic adjustment 
staff, (2) coordinate agency support and participation in assistance 
projects, and (3) assist in resolving community impact problems. 

(b) All Executive agencies shall : 

(1) Support, to the extent permitted by law. the economic adjust- 
ment assistance activities of the Secretary of Defense. Such support 
shall include the use and application of personnel, technical expertise, 
legal authorities, and available financial resources to the extent re- 
quired to provide a coordinated Federal response to the needs of in- 
dividual communities. States, and regions adversely affected by neces- 
sarv Defense changes. 

(2) Afford priority consideration to community requests for Fed- 
eral technical assistance, financial resources, excess or surplus property, 
or other re<iuirements that are part of a comprehensive plan used by 
the Economic Adjustment Committee. 

Sec. 4. Comfrucfiov. Nothing in this Order shall be construed as 
subjecting any function vested By law in, or assigned pursuant to law 
to, any agency or head thereof to the authority of any other agency or 
officer or as abrogating or restricting any such function in any manner. 

Jimmy Carter. 

The White House, March 27, 1978, 



153 



§401 MISCELLANEOUS ADMINISTRATIVE PROVISIONS 

EXCERPTS FROM NATIONAL SCIENCE AND TECHNOLOGY POLICY, 
ORGANIZATION AND PRIORITIES ACT OF 1976 

[Public Law 94-282, 90 Stat. 459] 
m ***** * 

TITLE IV— FEDERAL COORDINATING COUNCIL FOR 
SCIENCE, ENGINEERING, AND TECHNOLOGY 

ESTABLISHMENT AND FUNCTIONS 

Sec. 401. (a) There is established the Federal Coordinating Coun- 
cil for Science, Engineering, and Technology (hereinafter referred to 
as the "Council"). 

(b) The Council shall be composed of the Director of the Office of 
Science and Technology Policy and one representative of each of the 
following Federal agencies : Department of Agriculture, Department 
of Commerce, Department of Defense, Department of Health, Educa- 
tion, and Welfare, Department of Housing and Urban Development, 
Department of the Interior, Department of State, Department of 
Transportation, Veterans' Administration, National Aeronautics and 
Space Administration, National Science Foundation, Environmental 
Protection Agency, and Energy Research and Development Adminis- 
tration. Each such representative shall be an official of policy rank 
designated by the head of the Federal agency concerned. 

(c) The Director of the Office of Science and Technology Policy 
shall serve as Chairman of the Council. The Chairman may designate 
another member of the Council to act temporarily in the Chairman's 
absence as Chairman. 

(d) The Chairman may (1) request the head of any Federal agency 
not named in subsection (b) of this section to designate a represent- 
ative to participate in meetings or parts of meetings of the Council 
concerned with matters of substantial interest to such agency, and (2) 
invite other persons to attend meetings of the Council. 

(e) The Council shall consider problems and developments in the 
fields of science, engineering, and technology and related activities 
affecting more than one Federal agency, and shall recommend policies 
and other measures designed to — 

(1) provide more effective planning and administration of Fed- 
eral scientific, engineering, and technological programs, 

(2) identify research needs including areas requiring addi- 
tional emphasis, 

(3) achieve more effective utilization of the scientific, engineer- 
ing, and technological resources and facilities of Federal agencies, 
including the elimination of unwarranted duplication, and 

(4) further international cooperation in science, engineering, 
and technology. 

(f ) The Council shall perform such other related advisory duties as" 
shall be assigned by the President or by the Chairman. 

(g) For the purpose of carrying out the provisions of this section, 
each Federal agency represented on the Coimcil shall furnish neces- 
sary assistance to the Council. Such assistance may include — 

(1) detailing employees to the Council to perform such func- 
tions, consistent with the purposes of this section, as the Chairman 
may assign to them, and 

154 



MISCELLANEOUS ADMINISTRATIVE PROVISIONS §9 

(2) undertaking, upon request of the Chairman, such special 
studies for the Council as come within the fimctions herein 
' assigned. 

(h) For the purpose of conducting studies and making reports as 
directed by the Chairman, standing subcommittees and panels of the 
Council may be established. 

ABOLmON or FEDERAL CX)TJNCIL FOR SCIENCE AND TECHNOLOGY 

Sec. 402. The Federal Coimcil for Science and Technology, estab- 
lished pursuant to Executive Order 10807, issued March 13, 1959, as 
amended by Executive Order 11381, issued November 8, 1967, is hereby 
abolished. 

Approved May 11, 1976. 



DELEGATING CERTAIN FUNCTIONS VESTED IN THE 
PRESIDENT TO OTHER OFFICERS OF THE GOVERN- 
MENT 

EXCERPTS FROM EXECUTIVE ORDER 11609 
[36 Fed. Reg. 13747] 

By virtue of the authority vested in me by section 301 of title 3 of 
the United States Code, and as President of the United States, it is 
hereby ordered as follows : 

Section 1. 

* * m * * * * 

(21 ) The authority of the President imder section 108 of the Housing 
Act of July 15, 1949, c. 338, 63 Stat. 419, as amended (42 U.S.C. 1458), 
to transfer, or cause to be transferred, to the Secretary of Housing and 
Urban Development any right, title or interest held by the Federal 
Government or any department or agency thereof in any land (includ- 
ing buildings thereon) which is surplus to the needs of the Govern- 
ment and wliich a local public agency certifies will be within the area 
of a project being planned by it. 

Sec. 9. Ofilce of Management and Budget The Director of the Office 
of Management and Budget is hereby designated and empowered to 
exercise, without the approval, ratification, or other action of the Presi- 
dent, the following : 

*♦♦♦♦♦* 

(6) The authority of the President imder section 407(b) of the Act 
of August 30, 1957, 71 Stat. 556 (42 U.S.C. 1594j(b) )— approve 
regulations (relating to the rental of substandard housing for members 
of the uniformed services) prescribed pursuant to that section. The 
Secretaries referred to in section 407(c) of that Act shall furnish the 
Director of the Office of Management and Budget such reports with 
respect to matters within the scope of the regulations so approved as 
he may require and at such times as he may specify. 



155 



§11 MISCELLANEOUS ADMINISTRATIVE PROVISIONS 

(8) The authority of the President under the paragraph appearing 
under the heading "Expenses of Management Improvement" in title 
III of the Treasury, Post Office, and Executive Office Appropriation 
Act, 1971, P.L. 91-^22, 84 Stat. 877, or by any reenactment of the pro- 
visions of that paragraph in the same or in a different amount of 
funds, to allocate to any agency or office of the executive branch (in- 
cluding the Office of Management and Budget) funds appropriated by 
that paragraph or by any such reenactment of it. The Director of the 
Office of Management and Budget shall from time to time report to 
the President concerning activities carried on by executive agencies 
and offices with funds allocated under this paragraph and shall, con- 
sonant with law, exercise such direction and control with respect to 
those activities as he shall deem appropriate. 

* 4i * ♦ « * * 

Sec. 11. Orders superseded. The following are hereby superseded : 
******* 

(6) To the extent that it is inconsistent with this order, Executive 
Order No. 11541 of July 1, 1970. 

******* 

Richard Nixon. 
The White House, Jtdy 22^ 1971. 



COORDINATION OF FEDERAL URBAN PROGRAMS 

Executive Order 11297 
[31 Fed. Reg. 10765] 

Whereas our Nation has become predominantly urban in character 
and is confronted by serious problems arising from inherited urban 
decay and rapid urban growth ; and 

Whereas the living standards and general welfare of its people 
depend upon the solution of the problems of urban life ; and 

Whereas the Congress has provided in the Department of Housing 
and Urban Development Act that the Secretary of Housing and Urban 
Development (hereinafter referred to as the Secretary) shall "advise 
the President with respect to Federal programs and activities relating 
to housing and urban development; develop and recommend to the 
President policies for fostering the orderly growth and development of 
the Nation's urban areas ; and exercise leadership at the direction of 
the President in coordinating Federal activities affecting housing and 
urban development" ; and 

^Vhereas such activities are closely interrelated with other impor- 
tant Federal activities affecting urban areas so that there is a need for 
maximum consultation and cooperation among Federal departments 
and agencies in their administration of programs having impact on" 
urban areas ; and 

^Vhereas such consultation and cooperation are also essential to 
enable the Secretary to carry out his responsibilities under that Act to 
* provide technical assistance and information, including a clearing- 



156 



MISCBI>L^A3fE0FS=^ADHINISTRATIVE PROVISIONS §2 

house service to aid State, county^ towa, Tillage, or other local govern- 
ments in developing sol«tions t© ^©mmffliity and metropolitan devel- 
opment probleBas;*-e€mstilt«nd-cooperate with State Governors and 
State agencies . . . with respect to Federal and State programs for 
assisting communities in developing solutions to community and 
metropolitan development problems and for encouraging effective 
regional cooperation in the planning and conduct of c(Mnmunity and 
metropolitan development programs and projects" : 

Now, therefore, by virtue of the authority vested in me as President 
of the United States by the Constitution and laws of the United States, 
it is ordered as follows : 

Section 1. Functions of the Secretary of Housing and Urhan Devel- 
opment, (a) To assist the Secretary in carrying out his responsibili- 
ties pursuant to the Department of Housing and Urban Development 
Act, he shall convene, or authorize his representatives to convene, 
rneetings at appropriate times and places of the heads, or representa- 
tives designated by them, of such Federal departments and agencies 
with programs affecting urban areas as he deems necessary or desirable 
for the following purposes : 

(1) To provide a forum for consideration of mutual problems con- 
cerning Federal programs and activities affecting the development of 
urban areas and for the exchange of current information needed to 
achieve coordination of, and to avoid duplication in, such programs 
and activities. 

(2) To promote cooperation among Federal departments and agen- 
cies in achieving consistent policies, practices, and procedures for 
administration of their programs affecting urban areas. 

(3) To consult with and obtain the advice of the Federal depart- 
ments and agencies with respect to : 

(A) consultation and cooperation with State Governors and State 
and local agencies concerning Federal and State programs for assist- 
ing communities ; 

(B) provision of technical information, a clearinghouse service, 
and other assistance to State and local governments in solving com- 
munity and metropolitan development problems ; and 

(C) encouragement of comprehensive planning of, and effective 
regional cooperation in, local urban, coromunity, and metropolitan 
development activities. 

(4) To identify urban development problems of particular States, 
metropolitan areas, or communities which require interagency or 
intergovernmental coordination. 

(b) The Secretary shall make arrangements with such Federal 
departments and agrencies for working groups to^ consider special 
problems arising with respect to matters described in subsection (a) 
of this section. 

Sec. 2. Agency responsibilities. The heads of Federal departments 
and agencies having programs which have an impact on urban areas, 
or representatives designated by them, shall participate in meetings 
convened pursuant to this Order and, to the extent permitted by law 
and funds available, shall furnish information, at the request of the 
Secretary, pertaining to programs within the responsibilities of such 



157 



§3 MISCELLANEOUS ADMINISTRATIVB PROVISIONS 

departments or agencies, and such additional information as will assist 
tfee Seea?etary in providing a clearinghouse service to aid State and 
local governments in developing solutions to community and metro- 
politan development problems. 

Sec. 3. Constmction, Nothing in this Order shall be construed as 
subjecting any function vested by law in, or assigned pursuant to law 
to, any Federal department or agency or head thereof to the authority 
of any other agency or officer or as abrogating or restricting any such 
function in any manner. 

Sec. 4. Administrative arrangementB, (a) Each executive depart- 
ment and agency participating under section 1 or section 2 shall fur- 
nish necessary assistance for effectuating the provisions of this Order 
as authorized by section 214 of the Act of May 3, 1945, 69 Stat. 134 (31 
U.S.C.691). 

(b) The Department of Housing and Urban Development shall 
provide necessary administrative services pursuant to this Order. 

Lyndon B. Johnson. 

The White House, Augmt 11^ 1966. 



158 



§809 

Excerpt from Housing and Community Development Act of 1974 

[Public Law 95-383, 88 Stat. 633] 

• • * * * m m 

NATIONAL INSTITUTE OF BUILDING SCIENCES 

Sec. 809. (a)(1) The Congress finds (A) that the lack of an 
authoritative national source to make findings and to advise both the 
public and private sectors of the economy with respect to the use of 
building science and technology in achieving nationally acceptable 
standards and other technical provision for use in Federal, State, and 
local housing and building regulations is an obstacle to efforts by and 
imposes severe burdens upon all those who procure, design, construct, 
use, operate, maintain, and retire physical facilities, and frequently 
results in the failure to take full advantage of new and useful devel- 
opments in technolo^ which could improve our living environment; 

(B) that the establishment of model buildings codes or of a single 
national building code will not completely resolve the problem because 
of the difficulty at all levels of government in updating their housing 
and building regulations to reflect new developments in technology, 
as well as the irregularities and inconsistencies which arise in applying 
fciuch requirements to particular localities or special local conditions; 

(C) that the lack of uniform housing and building regulatory provi- 
sions increases the costs of construction and thereby reduces the 
amount of housing and other community facilities which can be pro- 
vided; and (D) that the existence of a smgle authoritative nationally 
recognized institution to provide for the evaluation of new technology 
could facilitate introduction of such innovations and their acceptance 
at the Federal, State, and local levels. 

(2) The Congress further finds, however, that while an authoritative 
source of technical findings is needed, various private organizations 
and institutions, private industry, labor, and Federal and other gov- 
ernmental agencies and entities are presently engaged in building 
research, technology development, testing, and evaluation, standards 
and model code development and promulgation, and information dis- 
semination. These existing activities should be encouraged and these 
capabilities effectively utilized wherever possible and appropriate to 
the purposes of this section. 

(3) The Congress declares that an authoritative nongovernmental 
instrument needs to be created to address the problems and issues 
described in paragraph (1), that the creation of such an instrument 
should be initiated by the Government, with the advice and assistance 
of the National Acadfemy of Sciences-National Academy of Engineer- 
ing-National Research Council (hereinafter referred to as the "Acad- 
emies-Research Council") and of the various sectors of the building 
community, including labor and management, technical experts in 
building science and technology, and the various levels of government. 

(b)(1) There is authorized to be established, for the purposes 
described in subsection (a) (3), an appropriate nonprofit, nongovern- 

159 1 



§809 NATIONAL INSTITUTE OF BUILDING SCIENCES * 

mental instrument to be known as the National Institute of Building 
Sciences (hereinafter referred to as the "Institute"), which shall not 
be an agency or establishment of the United States Government. The 
Institute shall be subject to the provisions of this section and, to the 
extent consistent with this section, to a charter of the Congress if such 
a charter is requested and issued or to the District of Columbia Non- 
profit Corporation Act if that is deemed preferable. 

(2) The Academies-Research Council, along with other agencies and 
organizations which are knowledgeable in the field of building tech- 
nology, shall advise and assist in (A) the establishment of the Insti- 
tute; (B) the development of an organizational framework to 
encourage and provide for the maximum feasible participation of 
public and private scientific, technical, and financial organizations, 
institutions, and agencies now engaged in activities pertinent to the 
development, promulgation, and maintenance of performance criteria, 
standards, and other technical provisions for building codes and other 
regulations; and (C) the promulgation of appropriate organizational 
rules and procedures including those for the selection and operation of 
a technical staff, such rules and procedures to be based upon the pri- 
mary object of promoting the public interest and insuring that the 
widest possible variety of interests and experience essential to the 
functions of the Institute are represented in the Institute's operations. 
Recommendations of the Academies-Research Council shall be based 
upon consultations with and recommendations from various private 
organizations and institutions, labor, private industry, and govern- 
mental agencies entities operating in the field, and the Consultative 
Council as provided for under subsection (c) (8). 

(3) Nothing in this section shall be construed as expressing the 
intent of the Congress that the Academies-Research Council itself be 
required to assume any function or operation vested in the Institute by 
or under this section. 

(c) (1) The Institute shall have a Board of Directors (hereinafter 
referred to as the "Board") consisting of not less than fifteen nor more 
than twenty-one members, appointed by the President of the United 
States by and with the advice and consent of the Senate. The Board 
shall be representative of the various segments of the building com- 
munity, of the various regions of the country, and of the consumers 
who are or would be affected by actions taken in the exercise of the 
functions and responsibilities of the Institute, and shall include (A) 
representatives of the construction industry, including representatives 
of construction labor organizations, product manufacturers, and build- 
ers, housing management experts, and experts in building standards, 
codes, and fire safety, and (B) members representative of the public 
interest in such numbers as may be necessary to assure that a majority 
of the members of the Board represent the public interest and that 
there is adequate consideration by the Institute of consumer interests 
in the exercise of its functions and responsibilities. Those representing, 
the public interest on the Board shall include architects, professional 
engineers, officials of Federal, State, and local agencies, and repre- 
sentatives of consumer organizations. Such members of the Board 
shall hold no financial interest or membership in, nor be employed 
by, or receive other compensation from, any company, association, or 
other group associated with the manufacture, distribution, installation, 
or maintenance of specialized building products, equipment, systems, 



160 



NATIONAL INSTITUTE OF BUILDING SCIENCES §809 

subsystems, or other construction materials and techniques for which 
there are available substitutes. 

(2) The members of the initial Board shall serve as incorporators 
and shall take whatever actions are necessary to establish the Institute 
as provided for under subsection (b) (1). 

(3) The term of office of each member of the initial and succeeding 
Boards shall be three years; except that (A) any member appointed 
to fill a vacancy occurring prior to the expiration of the term for which 
his predecessor was appointed shall be appointed for the remainder of 
such term; and (B) the terms of office of members first taking office 
shall begin on the date of incorporation and shall expire, as designated 
at the time of their appointment, one-third at the end of one year, 
one-third at the end of two ;years, and one-third at the end of three 
years. No member shall be eligible to serve in excess of three consecu- 
tive terms of three years each. Notwithstanding the preceding provi- 
sions of this subsection, a member whose term has expired may serve 
until his successor has qualified. 

(4) Any vacancy in the initial and succeeding Boards shall not 
affect its power, but shall be filled in the manner in which the original 
appointments were made, or, after the first five years of operation, 
as provided for by the organizational rules and procedures of the 
Institute. 

(5) The President shall designate one of the members appointed to 
the initial Board as Chairman ; thereafter, the members of the initial 
and succeeding Boards shall annually elect one of their number as 
Chairman. The members of the Board shall also elect one or more 
of their Members as Vice Chairman. Terms of the Chairman and Vice 
Chairman shall be for one year and no individual shall serve as Chair- 
man or Vice Chairman for more than two consecutive terms. 

(6) The members of the initial or succeeding Boards shall not, by 
reason of such membership, be deemed to be employees of the United 
States Government. They shall, while attending meetings of the Board 
or while engaged in duties related to such meetings or in other 
activities of the Board pursuant to this section, be entitled to receive 
compensation at the rate of $100 per day including traveltime, and 
while away from their homes or regular places of business they may be 
allowed travel expenses, including per diem in lieu of subsistence, equal 
to that authorized under section 5703 of title 5, United States Code, 
for persons in the Government service employed intermittently. 

(7) The Institute shall have a president and such other executive 
officers and employees as may be appointed by the Board at rates of 
compensation fixed by the Board. No such executive officer or employee 
may receive any salary or other compensation from any source other 
than the Institute during the period of his employment by the 
Institute. 

(8) The Institute shall establish, with the advice and assistance of 
the Academies-Research Council and other agencies and organizations 
which are knowledgeable in the field of building technology, a Con- 
sultative Council, membership in which shall be available to repre- 
sentatives of all appropriate private trade, professional, and labor 
organizations, private and public standards, code, and testing bodies, 
public regulatory agencies, and consumer groups, so as to insure a 
direct line of communication between such groups and the Institute 
Rnd a vehicle for representative hearings on matters before the 
Institute. 

161 



5809 NATIONAL INSTITUTE OF BUILDING SCIENCES 

(d) (1) The Institute shall have no power to issue any shares of 
stock, or to declare or pay any dividends. 

(2) No part of the income, or assets of the Institute shall inure to 
the benefit of any director, officer, employee, or other individual 
except as salary or reasonable compensation for services. 

(3) The Institute shall not contribute to or otherwise support any 
political party or candidate for elective public office. 

(e) (1) The Institute shall exercise its functions and responsibilities 
in four general areas, relating to building regulations, as follows: 

(A) Development, promulgation, and maintenance of nation- 
ally recognized performance criteria, standards, and other 
technical provisions for maintenance of life, safety, health, and 
public welfare suitable for adoption by building regulating 
jurisdictions and agencies, including test methods and other 
evaluative techniques relating to building systems, subsystems, 
components, products, and materials with due regard for consumer 
problems. 

(B) Evaluation and prequalification of existing and new build- 
ing technology in accordance with subparagraph ( A) . 

(C) Conduct of needed investigations in direct support of 
subparagraphs (A) and (B). 

(D) Assembly, storage, and dissemination of technical data 
ana other information directly related to subparagraphs (A), 
(B),and(C). 

(2) The Institute in exercising its functions and responsibilities 
described in paragraph (1) shall assign and delegate, to the maximum 
extent possible, responsibility for conducting each of the needed activi- 
ties described in paragraph (1) to one or more of the private organiza- 
tions, institutions, agencies, and Federal and other governmental 
entities with a capacity to exercise or contribute to the exercise of such 
responsibility, monitor the performance achieved through assi<rnnient 
and delegation, and, when deemed necessary, reassign and delegate 
such responsibility. 

(3) The Institute in exercising its fimctions and responsibilities 
under paragraphs (1) and (2) shall (A) give particular attention to 
the development of methods for encouraging all sectors of the economy 
to cooperate with the Institute and to accept and use its technical find- 
ings, and to accept and use the nationally recognized performance cri- 
teria, standards, and other technical provisions developed for use in 
Federal, State, and local building codes and other regulations which 
result from the program of the Institute; (B) seek to assure that its 
actions are coordinated with related requirements which are imposed 
in connection with community and environmental development gener- 
ally ; and (C) consult with the Department of Justice and other agen- 
cies of government to the extent necessary to insure that the national 
interest is protected and promoted in the exercise of its functions and 
responsibilities. 

(f ) (1) The Institute is authorized to accept contracts and grants 
from Federal, State, and local governmental agencies and other enti- 
ties, and grants and donations from private organizations, institutions, 
and individuals. 

(2) The Institute may, in accordance with rates and schedules estab- 
lished with guidance as provided under subsection (b)(2), establish 
fees and other charges for services provided by the Institute or under 
its authorization. 

162 



, NATIONAL INSTITUTE OF BUILDING SCIENCES $ 809 

(3) Amounts received by the Institute under this section shall be in 
addition to any amounts which may be appropriated to provide its 
initial operating capital under subsection (h). 

(g) (1) Every department, agency, and establishment of the Federal 
Government, in carrying out any building or construction, or any 
building- or construction-related programs, which involves direct 
expenditures, and in developing technical requirements for any such 
building or construction, shall be encouraged to accept the technical 
findings of the Institute, or any nationally recognized performance 
criteria, standards, and other technical provisions for building regula- 
tions brought about by the Institute, which may be applicable. 

(2) All projects and programs involving Federal assistance in the 
form of loans, grants, guarantees, insurance, or technical aid, or in any 
other form, shall be encouraged to accept, use, and comply with any of 
the technical findings of the Institute, or any nationally recognized 
performance criteria, standards, and other technical provisions for 
building codes and other regulations brought about by the Institute, 
which may be applicable to the purposes for which the assistance is to 
be used. 

(3) Every department, agency, and establishment of the Federal 
Government having responsibility for building or construction, or for 
building- or construction-related programs, is authorized and encour- 
aged to request authorization and appropriations for grants to the 
Institute for its general support, and is authorized to contract with 
and accept contracts from the Institute for specific services where 
deemed appropriate by the responsible Federal official involved. 

(4) The Institute shall establish and carry on a specific and con- 
tinuing program of cooperation with the States and their political 
subdivisions designed to encourage their acceptance of ^^ its technical 
findings and of nationally recognized performance criteria, standards, 
and other technical provisions for building regulations brought about 
by the Institute. Such program shall include (A) efforts to encourage 
any changes in existing State and local law to utilize or embody such 
findings and regulatory provisions; and (B) assistance to States in 
the development of inservice training programs for building officials, 
and in the establishment of fully staffed and qualified State technical 
agencies to advise local officials on questions of technical interpretation. 

(h) There is authorized to be appropriated to the Institute not to 
exceed $5,000,000 for the fiscal year 1975, and $5,000,000 for the fiscal 
year 1976, and $5,000,000 for each of the fiscal years 1977 and 1978, 
and any amounts not appropriated in fiscal years 1977 and 1978 may 
be appropriated in any fiscal year through 1982^ (with each appro- 
priation to be available until expended), to provide the Institute witli 
initial capital adequate for the exercise of its functions and responsi- 
bilities during such years; and thereafter the Institute shall be hnan- 
cially self-sustaining through the means described m subsection (t). 

(i) The Institute shall submit an annual report for the preceding 
fiscal year to the President for transmittal to the Congress withm 

1 Editorial change from word "and", as In original, to "of". ^^ „„^ , 

2 Sec. 24 of the Housing Authorization Act of 1976, Public Law 94-375. aT)proved 
August 3, 1976, 90 Stat. 1067, amended section 809(h) of the Housing and Community 
Devplonment Act of 1974. by inserting immediately after "fiscal year 1976" the following . 
** «nd $5,000,000 for each of the fiscal years 1977 and 1978". 

3 The phrase, "and anv amounts not appropriated in fiscal years 1977 and 1978 may be 
appropriated in any fiscal year through 1982" was added by Sec. 319 Housing and 
Community Development Amendments of 1978. PX. 95-557, 92 Stat. 2080. approved 
October 31. 1978. 

163 



§905 NATIONAL INSTITUTE OF BUIDING SCIENCES 

sixty days of its receipt. The report shall include a comprehensive and 
detailed report of the Institute's operations, activities, financial con- 
dition, and accomplishments under this section and may include such 
recommendations as the Institute deems appropriate. 

EXOERPTS FROM HOUSING AND COMMUNITY DEVELOPMENT AMENDMENTS 

or 1978 

[Public Law 95-557, 42 IT.S.C. B540] 
Paperwork Reduction 

Sec. 905. (a) The Congress finds and declares — 

(1) that various departments, agencies, and instrumentalities 
of the Federal Government with responsibilities involving hous- 
ing and housing finance programs, require, approve, use or other- 
wise employ a variety of different forms as residential mortgages 
(or deeds of trust or similar security instruments) as notes secured 
by those mortgages, and for applications, appraisals and other 
purposes, and that such duplication of forms constitutes a paper- 
work burden that adds to the costs imposed on the Nation's 
homeowners and home buyers ; 

(2) that unnecessary paperwork impairs the effectiveness of 
Federal housing and housing finance programs ; 

(3) that both single -family and multi-family programs are 
affected ; and 

(4) that simplification of paperwork imposed by Federal hous- 
ing and housing finance programs would contribute to achieving 
the Nation's housing goals by reducing housing costs. 

(b) (1) Insofar as it is practicable and to the extent permitted by 
law and to the extent that such action would result in a reduction in 
paperwork and regulatory burden, the Department of Housing and 
Urban Development and the Veterans' Administration shall employ 
in their respective programs — 

(A) uniform single-family and multi-family note and mort- 
gage forms ; 

(B) a uniform application form for mortgage approval and 
commitment for mortgage insurance ; 

(C) a uniform form for computation of the monthly net effec- 
tive income of applicants ; 

(D) a uniform property appraisal form ; 

(E) a uniform settlement statement which shall satisfy the 
requirements of the Real Estate Settlement Procedures Act ; and 

(F) such other consolidated or simplified forms, the consolida- 
tion or simplification of which the Secretary of Housing and 
Urban Development and the Administrator of Veterans' Affairs 
mutually agree would contribute to a reduction in the paperwork _ 
and regulatory burden of housing and housing finance programs 
administered by the agencies. 

(2) Each agency may employ riders, addenda, or similar forms of 
modification agreements to adapt such uniform forms to its respective 
programs and policies, consistent with the goals of minimizing the use 
and extent of such modification agreements and maximizing the suita- 
ability of such forms for the use of all participants, public and private. 



164 



OFFICE OF INSPECTOR GENERAL §2 

(3) To the extent permitted by law. the President may require the 
Farnlers Home Administration and the Administrator of the Farmers 
Home Administration to comply with the requirements of this section 
if such compliance will contribute to a reduction in the paperwork and 
regulatory burden of housing and housing finance programs adminis- 
tered by the agency. 

(c) The Director of the Office of Management and Budget shall 
coordinate and monitor the development and implementation by Fed- 
eral departments and agencies of the efforts required by subsection 
(b) and shall report to the Congress on such development and imple- 
mentation as part of each report required under Public Law 93-556. 

Approved October 31. 1978. 

Inspectok General Act of 1978 ^ 

Be it enacted hy the Senate and Hov.se of Representatives of the 
United States of America in Congress assembled, That this Act be 
cited as the ''Inspector General Act of 1978". 

PURPOSE ; ESTABLISHMENT 

Sec. 2. In order to create independent and objective units — 

(1) to conduct and supervise audits and investigations relating 
to programs and operations of the Department of Agriculture, 
the Department of Commerce, the Department of Housing and 
Urban Development, the Department of the Interior, the Depart- 
ment of Labor, the Department of Transportation, the Com- 
munity Services Administration, the Environmental Protection 
Agency, the General Services Administration, the National Aero- 
nautics and Space Administration, the Small Business Adminis- 
tration, and the Veterans' Administration ; 

(2) to provide leadership and coordination and recommend 
policies for activities designed (A) to promote economy, efficiency, 
and effectiveness in the administration of, and (B) to prevent 
and detect fraud and abuse in, such programs and operations ; and 

(3) to provide a means for keeping the head of the establishment 
and the Congress fully and currently informed about problems 
and deficiencies relating to the administration of such programs 
and operations and the necessity for and progress of corrective 
action : 

thereby is hereby established in each of such establishments an office 
of Inspector General. 

.VPPOINTMENT AXD REMOVAL OP OFFICERS 

Sec. 3. (a) There shall be at the head of each Office an Inspector Gen- 
eral who shall be appointed by the President, by and with the advice 
and consent of the Senate, without regard to political affiliation and 
solely on the basis of iiitegrity and demonstrated ability in accounting, 
auditing, financial analysis, law, management analysis, public adminis- 
tration, or investigations. Each Inspector General shall report to and 
be under the general supervision of the head of the establishment 
involved or, to the extent such authority is delegated, the officer next 
ni rank below such head, but shall not report to, or be subject to super- 



Enacted on October 12. 1978 as P.L. 95-452. 92 Stat. 1101. 

165 



§4 OFFICE OF INSPECTOR GENERAL 

vision by, any other officer of such establishment. Neither the head of 
the establishment nor the officer next in rank below such head shall pre- 
vent or prohibit the Inspector General from initiating, carrying out, or 
completing any audit or investigation, or from issuing any subpena 
during the course of any audit or investigation. 

(b) An Inspector General may be removed from office by the Presi- 
dent. The President shall communicate the reasons for any such re- 
moval to both Houses of Congress. 

(c) For the purposes of section 7324 of title 5, United States Code, 
no Inspector General shall be considered to be an employee who deter- 
mines policies to be pursued by the United States in the nationwide 
administration of Federal laws. 

(d) Each Inspector General shall, in accordance with applicable 
laws and regulations governing the civil service — 

(1) appoint an Assistant Inspector General for Auditing who 
shall have the responsibility for supervising the performance of 
auditing activities relating to programs and operations of the 
establishment, and 

(2) appoint an Assistant Inspector General for Investigations 
who shall have the responsibility for supervising the perform- 
ance of investigative activities relating to such programs and 
operations. 

DUTIES AND RESPONSIBILITIES 

Sec. 4. (a) It shall be the duty and responsibility of each Inspector 
General, with respect to the establishment within which his Office is 
established — 

(1) to provide policy direction for and to conduct, supervise, 
and coordinate audits and investigations relating to the programs 
and operations of such establishment ; 

(2) to review existing and proposed legislation and regulations 
relating to programs and operations of such establishment and to 
make recommendations in the semiannual reports required by sec- 
tion 5(a) concerning the impact of such legislation or regulations 
on the economy and efficiency in the administration of programs 
and operations administered or financed by such establishment or 
the prevention and detection of fraud and abuse in such programs 
and operations; 

(3) to recommend policies for, and to conduct, supervise, or 
coordinate other activities carried out or financed by such estab- 
lishment for the purpose of promoting economy and efficiency in 
the administration of, or preventing and detecting fraud and 
abuse in, its programs and operations ; 

(4) to recommend policies for, and to conduct, supervise, or 
coordinate relationships between such establishment and other 
Federal agencies. State and local governmental agencies, and non- 
governmental entities with respect to (A) all matters relating to 
the promotion of economy and efficiency in the administration of, 
or the prevention and detection of fraud and abuse in, programs 
and operations administered or financed by such establishment, or 
(B) the identification and prosecution of participants in such 
fraud or abuse ; and 

(5) to keep the head of such establishment and the Congress 
fully and currently informed, by means of the reports required by 
section 5 and otherwise, concerning fraud and other serious 

166 



OFFICE OF INSPECTOR GENERAL §5 

problems, abuses, and deficiencies relating to the administration 
of programs and operations administered or financed b}^ such 
establishment, to recommend corrective action concerning such 
problems, abuses, and deficiencies, and to report on the progress 
made in implementing such corrective action. 

(b) In carrying out the responsibilities specified in subsection (a) 
(1) , each Inspector General shall — 

(1) comply with standards established by the Comptroller Gen- 
eral of the United States for audits of Federal establishments, 
organizations, programs, activities, and functions; 

(2) establish guidelines for determining when it shall be appro- 
priate to use non-Federal auditors; and 

(3) take appropriate steps to assure that any work performed 
by non-Federal auditors complies with the standards established 
by the Comptroller General as described in paragraph (1). 

(c) In carrying out the duties and responsibilities established under 
this Act, each Inspector General shall give particular regard to the 
activities of the Comptroller General of the United States with a view 
toward avoiding duplication and insuring effective coordination and 
cooperation. 

(d) In carrying out the duties and responsibilities established under 
this Act, each Inspector General shall report expeditiously to the 
Attorney General whenever the Inspector General has reasonable 
grounds to believe there has been a violation of Federal criminal law. 

REPORTS 

Sec. 5. (a) Each Inspector General shall, not later than April 30 
and October 31 of each year, prepare semiannual reports summarizing 
the activities of the Office during the immediately preceding six-month 
periods ending ^larch 31 and September 30. Such reports shall include, 
but need not be limited to — 

(1) a description of significant problems, abuses, and deficien- 
cies relating to the administration of programs and operations 
of such establishment disclosed by such activities during the re- 
porting period: 

(2) a description of the recommendations for corrective action 
made by the Office during the reporting period with respect to 
significant problems, abuses, or deficiencies identified pursuant to 
paragraph (1) ; 

(3) an identification of each significant recommendation de- 
scribed in preA'ious semiannual reports on which corrective action 
has not been completed : 

(4) a summary of matters referred to prosecutive authorities 
and the prosecutions and convictions which have resulted ; 

(5) a summary of each report made to the head of the estab- 
lishment under section 6(b) (2) during the reporting period; and 

(6) a listing of each audit report completed by the Office during 
the reporting period. 

(b) Semiannual reports of each Inspector General shall be fur- 
nished to the head of the establishment involved not later than 
April 30 and October 31 of each year and shall be transmitted by such 
head to the appropriate committees or subcommittees of the Congress 
within thirty days after receipt of the report, together with a report 

167 



§6 OFFICE OF INSPECTOR GENERAL 

by the head of the establishment containing any comments such head 
deems appropriate. 

(c) Within sixty days of the transmission of the semiannual reports 
of each Inspector General to the Congress, the head of each establish- 
ment shall make copies of such report available to the public upon 
request and at a reasonable cost. 

(d) Each Inspector General shall report immediately to the head 
of the establishment involved whenever the Inspector General becomes 
aware of particularly serious or flagrant problems, abuses, or deficien- 
cies relating to the administration of programs and operations of 
such establishment. The head of the establishment shall transmit any 
such report to the appropriate committees or subcommittees of Con- 
gress within seven calendar days together with a report by the head 
of the establishment containing any comments such head deems 
appropriate. 

authority; administration provisions 

Sec. 6. (a) In addition to the authority otherwise provided by this 
Act, each Inspector General, in carrying out the provisions of this 
Act, is authorized — 

( 1 ) to have access to all records, reports, audits, reviews, docu- 
ments, papers, recommendations, or other material available to 
the applicable establishment which relate to programs and opera- 
tions with respect to which that Inspector General has responsi- 
bilities under this Act ; 

(2) to make such investigations and reports relating to the 
administration of the programs and operations of the applicable 
establishment as are, in the judgment of the Inspector General, 
necessary or desirable; 

(3) to request such information or assistance as may be neces- 
sary for carrying out the duties and responsibilities provided by 
this Act from any Federal, State, or local governmental agency 
or unit thereof; 

(4) to require by subpena the production of all information, 
documents, reports, answers, records, accounts, papers, and other 
data and documentary evidence necessary in the performance of 
the functions assigned by this Act, which subpena, in the case of 
contumacy or refusal to obey, shall be enforceable by order of any 
appropriate United States district court: Provided^ That pro- 
cedures other than subpenas shall be used by the Inspector General 
to obtain documents and information from Federal agencies; 

(5) to have direct and prompt access to the head of the estab- 
lishment involved when necessary for any purpose pertaining to 
the performance of functions and responsibilities under this Act ; 

(6) to select, appoint, and employ such officers and employees as 
may be necessary for carrying out the functions, powers, and 
duties of the Office subject to the provisions of title 5, United 
States Code, governing appointments in the competitive service, 
and the provisions of chapter 51 and subchapter III of chapter 53 
of such title relating to classification and General Schedule pay 
rates ; 

(Y) to obtain services as authorized by section 3109 of title 5, 
United States Code, at daily rates not to exceed the equivalent 
rate prescribed for grade GS-18 of the General Schedule by 
section 5332 of title 5, United States Code ; and 

168 , 



OFFICE OF INSPECTOR GENERAL §7 

(8) to the extent and in such amounts as may be provided in 
advance by appropriations Acts, to enter into contracts and other 
arrangements for audits, studies, analyses, and other services with 
public agencies and with private persons, and to make such pay- 
ments as may be necessary to carry out the provisions of this Act. 
(b)(1) Upon request of an Inspector General for information or 
assistance under subsection (a) (3), the head of any Federal agency 
involved shall, insofar as is practicable and not in contravention of 
any existing statutory restriction or regulation of the Federal agency 
from which the information is requested, furnish to such Inspector 
General, or to an authorized designee, such information or assistance. 
(2) Whenever information or assistance requested under subsection 
(a)(1) or (a)(3) is, in the judgment of an Inspector General, 
unreasonably refused or not provided, the Inspector General shall 
report the circumstances to the head of the establishment involved 
without delay. 

(c) Each head of an establishment shall provide the Office within 
such establishment with appropriate and adequate office space at cen- 
tral and field office locations of such establishment, together with such 
equipment, office supplies, and communications facilities and services 
as may be necessary for the operation of such offices, and shall provide 
necessary maintenance services for such offices and the equipment and 
facilities located therein. 

EMPLOYEE COMPLAINTS 

Sec. 7. (a) The Inspector General may receive and investigate com- 
plaints or information from an employee of the establishment concern- 
ing the possible existence of an activity constituting a violation of law, 
rules, or regulations, or mismanagement, gross waste of funds, abuse of 
authority or a substantial and specific danger to the public health and 
safety. 

(b) The Inspector General shall not, after receipt of a complaint or 
information from an employee, disclose the identity of the employee 
without the consent of the employee, unless the Inspector General 
determines such disclosure is unavoidable during the course of the 
investigation. 

(c) Any employee who has authority to take, direct others to take, 
recommend, or approve any personnel action, shall not, with respect to 
such authority, take or threaten to take any action against any 
employee as a reprisal for making a complaint or disclosing informa- 
tion to an Inspector General, unless the complaint was made or the 
information disclosed with the knowledge that it was false or with 
willful disregard for its truth or falsity. 



transfer of FUNCTIONS 

Sec. 9. (a) There shall be transferred — 

(1) to the Office of Inspector General — 

(A) of the Department of Agriculture, the offices of that 
department referred to as the ''Office of Investigation" and 
the "Office of Audit"; 

(B) of the Department of Commerce, the offices of that 
department referred to as the "Office of Audits" and the 
"Investigations and Inspections Staff" and that portion of 

169 

45-70M 0-79-12 



§9 OFFICE OF INSPECTOR GENERAL 

the office referred to as the "Office of Investigations and 
Security" which has responsibility for investigation of 
alleged criminal violations and program abuse ; 

(C) of the Department of Housing and Urban Develop- 
ment, the office of that department referred to as the "Office 
of Inspector General" ; 

(D) of the Department of the Interior, the office of 
that department referred to as the "Office of Audit and 
Investigation" ; 

(E) of the Department of Labor, the office of that depart- 
ment referred to as the "Office of Special Investigations" ; 

(F) of the Department of Transportation, the offices of 
that department referred to as the "Office of Investigations 
and Security" and the "Office of Audit" of the Department, 
the "Offices of Investigations and Security, Federal Aviation 
Administration", and "External Audit Divisions, Federal 
Aviation Administration", the "Investigations Division and 
The External Audit Division of the Office of Program' 
Review and Investigation, Federal Highway Administra- 
tion", and the "Office of Program Audits, Urban Mass 
Transportation Administration" ; 

(G) of the Community Services Administration, the offices 
of that agency referred to as the "Inspections Division", 
the "External Audit Division", and the "Internal Audit 
Division" ; 

(H) of the Environmental Protection Agency, the offices 
of that agency referred to as the "Office of Audit" and the 
"Security and Inspection Division" ; 

(I) of the General Services Administration, the offices of 
that agency referred to as the "Office of Audits" and the 
"Office of Investigations" ; 

(J) of the National Aeronautics and Space Administration, 
the offices of that agency referred to as the "Management 
Audit Office" and the "Office of Inspections and Security"; 
(K) of the Small Business Administration, the office of 
that agency referred to as the "Office of Audits and Investi- 
gations"; and 

(L) of the Veterans' Administration, the offices of that 
agency referred to as the "Office of Audits" and the "Office 
of Investigations" ; and 
(2) such other offices or agencies, or functions, powers, or duties 
thereof, as the head of the establishment involved may determine 
are properly related to the functions of the Office and would, if 
so transferred, further the purposes of this Act, 
except that there shall not be transferred to an Inspector General 
under paragraph (2) program operating responsibilities. 

(b) The personnel, assets, liabilities, contracts, property, records, 
and unexpended balances of appropriations, authorizations, alloca- 
tions, and other funds employed, hold, used, arising from, available 
or to be made available, of any office or agency the functions, powers, 
and duties of which are transferred under subsection (a) are hereby 
transferred to the applicable Office of Inspector General. 

(c) Personnel transferred pursuant to subsection (b) shall be trans- 
ferred in accordance with applicable laws and regulations relating to 
the transfer of functions except that the classification and compen- 

170 



OFFICE OF INSPECTOR GENERAL §10 

sation of such personnel shall not be reduced for one year after such 
transfer. 

(d) In any case where all the functions, powers, and duties of any 
office or agency are transferred pursuant to this subsection, such office 
or agency shall lapse. Any person who, on the effective date of this 
Act, held a position compensated in accordance with the General 
Schedule, and who, without a break in service, is appointed in an Office 
of Inspector General to a position having duties comparable to those 
performed immediately preceding such appointment shall continue 
to be compensated in the new position at not less than the rate provided 
for the previous position, for the duration of service in the new 
position. 

CONFORMING AND TECHNICAL AMENDMENTS 

Sec. 10. (a) Section 5815 of title 5, United States Code, is amended 
by adding at the end thereof the following new paragraphs : 

"(122) Inspector General, Department of Health, Education, 
and Welfare. 

" (123) Inspector General, Department of Agriculture. 
"(124) Inspector General, Department of Housing and Urban 
Development. 

"(125) Inspector General, Department of Labor. 

"(126) Inspector General, Department of Transportation. 

"(127) Inspector General, Veterans' Administration.". 

(b) Section 5316 of title 5, Ignited States Code, is amended by add- 
ing at the end thereof the following new paragraphs : 

" ( 144) Deputy Inspector General, Department of Health, Edu- 
cation, and Welfare. 

"(145) Inspector General, Department of Commerce. 

" ( 146 ) Inspector General , Department of the Interior. 

"(147) Inspector General, Community Services Administra- 
tion. 

"(148) Inspector General. Environmental Protection Agency. 

"(149) Inspector General, General Services Administration. 

"(150) Inspector General, National Aeronautics and Space 
Administration. 

"(151) Inspector General, Small Business Administration.''. 

(c) Section 202(e) of the Act of October 15, 1976 (Public Law 
94-505, 42 U.S.C. 3522), is amended by striking out "section 6(a) (1)" 
and "section 6(a)(2)'' and inserting' in lieu thereof "section 206(a) 
(1)" and "section 206(a) (2)", respectively. 

DEFINITIONS 

Sec. 11. As used in this Act — 

(1) the term "head of the establishment" means the Secretary 
of Agriculture, Commerce, Housing and Urban Development, the 
Interior, Labor, or Transportation or the Administrator of Com- 
munity Services, Environmental Protection, General Services, 
National Aeronautics and Space, Small Business, or Veterans 
Affairs, as the case may be : . 

(2) the term "establishment" means the Department of Agri- 
culture, Commerce, Housing and Urban Development, the Inte- 
rior, Labor, or Transportation or the Community Services 
Administration, the Envii'onmental Protection Agency, the Gen- 

171 



§12 OFFICE OF INSPECTOR GENERAL 

eral Services Administration, the National Aeronautics and Space 
Administration, the Small Business Administration, or the Vet- 
erans' Administration, as the case may be ; 

(3) the term "Inspector General" means the Inspector General 
of an establishment ; 

(4) the term "Office" means the Office of Inspector General of 
an establishment ; and 

(5) the term "Federal agency" means an agency as defined in 
section 552(e) of title 5 (including an establishment as defined 
in paragraph (2) ) , United States Code, but shall not be construed 
to include the General Accounting Office. 

EFFECTIVE DATE 

Sec. 12. The provisions of this Act and the amendments made by 
this Act shall take effect October 1, 1978. 
Approved October 12, 1978. 



172 



NATIONAL HOUSING ACT 

[Public Law 479, 73d Congress, 48 Stat. 1246, 12 U.S.C. 1701 et seq.] 

AN ACT To encourage improvement in housing standards and conditions, to pro- 
vide a system of mutual mortgage insurance, and for other purposes. 

Be it eiwcted hy the Senate and House of Representatives of the 
United States of America in Congress assembled, That this Act may be 
cited as the ''National Housing Act." 

title i— housing renovation and 
modernization 

ad:\iinistrative provisions ^ 

Section 1. The ^ powers conferred by this Act shall be exercised 
by the Secretary of Housing and Urban Development (hereinafter 
referred to as the "Secretary") . 

In order to carry out the provisions of this title and titles II, III, V, 
VI, VII. VIII, IX, X, and XI, the Secretary may establish such 
agencies, accept and utilize such voluntary and uncompensated serv- 
ices, utilize such Federal officers and employees, and, with the con- 
sent of the State, such State and local officers and employees, and ap- 
point such other officers and employees as he may find necessary, and 
may prescribe their authorities, duties and responsibilities. The Secre- 
tary may delegate any of the functions and powers conferred upon 
him under this title and titles II, III, V, VI, VII, VIII, IX, X, and 
XI, to such officers, agents, and employees as he may designate or ap- 
point and may make such expenditures (including expenditures for 
personal services and rent at the seat of government and elsewhere for 
law books and books of reference, and for paper, printing, and bind- 
ing) as are necessary to carry out the provisions of this title and titles 

1 Sec 1 (b) of Public T/aw 90-19, approved May 25, 1967, 81 Stat. 17, substituted this 
heading for "Creation of Federal Housino: Administration." 

2 Sec. 1 of Public Law 90-19. approved May 25, 1967. 81 Stat. 18, amended this sentence 
to read as set forth in the text. Prior to this amendment the sentence read as follows : 
"The President is authorized to create a Federal Housing Administration, all of the powers 
of which shall be exercised by a Federal Housing Commissioner (hereinafter referred to 
as the 'Coniniissioner'), who shall be appointed by the President, by and with the advice 
and consent of the Senate." 

The Department of Housing and Urban Development Act, Public Law 89-174, effective 
November 9. 19(55. 79 Stat. 667, established the Department of Housing and Urban Develop- 
ment and provided in sec. 4(a) that "There shall be in the Department a Federal Housing 
Commissioner, who shall be one of the Assistant Secretaries, who shall head a Federal 
Housing Administration within the Department, who shall have such duties and powers 
as may be prescribed by the Secretary, and who shall administer, under the supervision 
and direction of the Secretary, departmental programs relating to the private mortgage 
market." Sec. 5(a) of that act transferred to and vested in the Secretary of Housing and 
Urban Development all of the functions, powers and duties of the Federal Housing Ad- 
ministration and of the heads and other officers and offices of that Administration. 

Sec. 1 of Public Law 90-19, amended all provisions in the "National Housing Act with 
respect to its administration to reflect this transfer. The changes are too numerous to 
be noted by separate footnotes. 



173 



1 2 NATIONAL HOUSING ACT 

II, III, V, VI, VII, VIII, IX, X, and XI without regard to any 
other provisions of law governing the expenditure of public funds. 
All such compensation, expenses, and allowances shall be paid out of 
funds made available by this Act : Provided^ That, notwithstanding 
any other provisions of law except provisions of law hereafter enacted 
expressly in limitation hereof, all expenses of the Department of Hous- 
ing and Urban Development in connection with the examination and 
insurance of loans or investments under any title of this Act, all 
properly capitalized expenditures, and other necessary expenses not 
attributable to general overhead in accordance with generally 
accepted accounting principles shall be considered nonadministrative 
and payable from funds made available by this Act, except that, unless 
made pursuant to specific authorization by the Congress therefor, ex- 
penditures made in any fiscal year pursuant to this proviso, other than 
the payment of insurance claims and other than expenditures (in- 
cluding services on a contract or fee basis, but not including other 
personal services) in connection with the acquisition, protection, com- 
pletion, operation, maintenance, improvement, or disposition of real 
or personal property of the Department acquired under authority of 
this Act, shall not exceed 35 per centum of the income received by 
the Department of Housing and Urban Development from premiums 
and fees during the preceding fiscal year. The Secretary shall, in carry- 
ing out the provisions of this title and titles II, III, V, VI, VII, VIII, 
IX, X, and XI be authorized, in his official capacity to sue and be 
sued in any court of competent jurisdiction. State or Federal. 

INSURANCE OF FINANCIAL INSTITUTIONS 

Sec. 2. (a) The Secretary is authorized and empowered upon such 
terms and conditions as he may prescribe, to insure banks, trust com- 
panies, personal finance companies, mortgage companies, building 
and loan associations, installment lending companies, and other such 
financial institutions, which the Secretary finds to be qualified by 
experience or facilities and approves as eligible for credit insurance, 
against losses which they may sustain as a result of loans and advances 
of credit, and purchases of obligations representing loans and ad- 
vances of credit, made by them on and after July 1, 1939, and prior to 
October 1, 1979/ for the purpose of (i) financing alterations, repairs, 
and improvements upon or in connection with existing structures, or 

1 Sec. 202(a), Housing and Urban Development Act of 1965, Public Law 89-117 ap- 
proved August 10, 1965, 79 Stat. 451, 465, substituted "October 1, 1969." for "October 1, 
1965,"; sec. 2(a) of Public Law 91-78, approved September 30, 1969, S3 Stat 125^ sub- 
stituted "January 1, 1970" for "October 1, 1969,"; sec. 101(a), Housing and Urban 
Development Act of 1969, Public Law 91-152, approved December 2, 1969, 83 Stat. 379, 
substituted "October 1, 19T0," for "January 1, 1970"; Sec. 1(a) of Public Law 91-432, 
aporoved October 2, 1970. 84 Stat. 886, substituted "November 1, 1970" for "October 1, 
1970"; Sec. 1(a) of Public Law 91-473, approved October 21, 1970, 84 Stat. 1064, sub- 
stituted "December 1, 1970'^ for "November 1, 1970"; Sec. 1(a) of Public Law 91-525, 
approved December 1, 1970, 84 Stat. 1884, substituted "Januarv 1, 1971" for "December 1, 
1970" ; and sec. 101(a), Housing and Urban Development Act of 1970, Public Law 91-609, 
approved December 31, 1970, 84 Stat. 1770, substituted "October 1, 1972" for "Januarv 1. 
1971". Sec. 1 (a) of Public Law 92-503. approved October 18, 1972, 86 Stat. 906, substituted 
"June 30, 1973" for "October 1, 1972". Sec. 1(a) of Public Law 93-85. approved August 
10, 1973, 87 Stat. 220. substituted "October 1, 1973" for "June 30, 1973". Sec. 1(a) of 
Public Law 93-117. approved October 2, 1973, 87 Stat. 421, substituted "October 1, 1974" 
for "October 1. 1973". Sec 316 (a) of Housing and Community Development Act of 1974, 
Public Law 9.^-383. 88 Stat. 633, approved August 22, 1974, substituted "June 30, 1977" 
for "October 1, 1974" ; Public Law 95-60, approved June 30, 1977, substituted "August 1, 
1977" for "June 30, 1977" ; Public Law 95-80 approved July 31, 1977 substituted "Octo- 
ber 1, 1977" for "August 1, 1977" : Housing and Community Development Act of 1977. 
J*"Hl^^^/,^'^,rJ*^""|28, approved October 12, 1977 substituted "October 1. 1978" for "October 
1. 1979.' ; Housing and Community Development Amendments of 1978. Sec. 301(a). Public 
Law 95-557, 92 Stat. 2080, approved October 31, 1978, substituted "October 1, 1979" 
for "October 1, 1978." 

174 



NATIONAL HOUSING ACT §2 

mobile homes ^ and the building of new structures, upon urban, S'^b- 
urban, or rural real property (including the restoration, rehabilita- 
tion, rebuilding, and replacement of such improvements which have 
been damaged or destroyed by earthquake, conflagration, tornado, hur- 
ricane, cyclone, flood, or other catastrophe) , by the owners thereof or 
by lessees of such real property under a lease expiring not less than 
six months after the maturity of the loan or advance of credit ; and ^ 
for the purpose of (ii) financing the purchase of a mobile home to be 
used by the owner as his principal residence or financing the purchase 
of a lot on which to place such home and paying expenses reason- 
ably necessary for the appropriate preparation of such lot, includ- 
ing the installation of utility connections, sanitary facilities, and 
paving, and the construction of a suitable pad, or financing only the 
acquisition of such a lot either with or without such preparation 
by an owner of a mobile home ; ^ and for the purpose of financing the 
preservation of historic structures, and, as used in this section, 
the term "historic structures" means residential structures which are 
registered in the National Register of Historic Places or which are 
certified by the Secretai^^ of the Interior to confomi to National 
Register criteria; and the term "preservation" means restoration or 
rehabilitation undertaken for such purposes as are approved b}^ the 
Secretary in regulations issued by him, after consulting with the 
Secretary of the Interior.* 

In no case shall the insurance granted by the Secretary under this 
section to any such financial institution on loans, advances of credit, 
and purchases made by such financial institution for such purposes on 
and after July 1, 1939, exceed 10 per centum of the total amount of 
such loans, advances of credit, and purchases: Provided^^ That with 
respect to any loan, advance of credit, or purchase made after the effec- 
tive date of the Housing Act of 1954,^ the amount of any claim for loss 
on any such individual loan, advance of credit, or purchase paid by the 
Secretary under the provisions of this section to a lending institution 
shall not exceed 90 per centum of such loss/ 

^ After the effective date of the Housing Act of 1954,^ (i) the Sec- 
retary shall not enter into contracts for insurance pursuant to this 
section except with lending institutions which are subject to the inspec- 
tion and supervision of a governmental agency required by law to 
make periodic examinations of their books and accounts, and which the 

1 Sec. 309(c) of Housing and Community Development Act of 1974, Public Law 93-383, 
88 Stat. 633, approved August 22, 1974, inserted the words "or mobile homes". 

a Sec. 103(c)(2), Housing and Urban Development Act of 1969, Public Law 91-152, 
approved December 24, 1969, 83 Stat. 379, 380, inserted "; and for the purpose of (li) 
financing the purchase of a mobile home to be used by the owner as his principal residence". 

3 Sec. 309(b)(2) of Housing and Communltv Development Act of 1974, Public Law 
93-383, 88 Stat. 633, approved August 22, 1974, amended the first sentence of this sub- 
section. 

* Sec. 4(a) (1) of Emergency Home Purchase Assistance Act of 1974, Public Law 93-449, 
88 Stat. 1364, approved October 18, 1974. amended the first sentence of this section. 

5 This proviso added by sec. 101(a), Housing Act of 1954, Public Law 560, 83d Con- 
gress, approved August 2, 1954, 68 Stat. 590. 

•Sec. 101(b), Housing Act of 1954, Public Law 560, 83d Congress, approved August 2, 
1954, 68 Stat. 590, provided that as used in this section 2(a) the "effective date of the 
Housing Act of 1954" should mean "the first day after the first full calendar month follow- 
ing the date of approval of the Housing Act of 1954" (August 2, 1954). 

'Sec. 2(a) of Public Law 86-788, approved September 14. 1960, 74 Stat. 1027. 1028. 
deleted the last sentence of subsection (a) which read: "The aggregate amount of all 
loans, advances of credit, and obligations purchased, exclusive of financing charges, with 
respect to which insurance may be heretofore or hereafter granted under this section and 
outstanding at any one time shall not exceed $1,750,000,000. 

8 This paragraph added by sec. 101(a) of the Housing Act of 1954, Public Law 560, 83d 
Congress, approved August 2, 1954, 68 Stat. 590. 

» Sec. 101(b) of the Housing Act of 1954, Public Law 560, 83d Congress, approved August 
2, 1954, 68 Stat. 590, provided that as used in this section 2(a) the "effective date of 
the Housing Act of 1954" should mean "the first day after the first full calendar month 
following the date of approval of the Housing Act of 19Q4" (August 2, 1954). 

175 



§2 NATIONAL HOUSING ACT 

Secretary finds to be qualified by experience or facilities to make and 
service such loans, advances or purchases, and with such other lending 
institutions which the Secretary approves as eligible for insurance 
pursuant to this section on the JDasis of their credit and their experi- 
ence or facilities to make and service such loans, advances or pur- 
chases: (ii) only such items as substantially protect or improve 
the basic livability or utility of properties shall be eligible for financ- 
ing under this section, and therefore the Secretary shall from time to 
time declare ineligible for financing under this section any item, 
product, alteration, repair, improvement, or class thereof which he 
determines would not substantially protect or improve the basic liva- 
bility or utility of such properties, and he may also declare ineligible 
for financing under this section any item which he determines is espe- 
cially subject to selling abuses; and (iii) the Secretary is hereby 
authorized and directed, by such regulations or procedures as he shall 
deem advisable, to prevent the use of any financial assistance under 
this section (1) with respect to new residential structures other ^ than 
mobile homes that have not been completed and occupied for at least 
six months, or (2) which would, through multiple loans, result in an 
outstanding aggregate loan balance with respect to the same structure 
exceeding the dollar amount limitation prescribed in this subsection 
for the type of loan involved : Provided f That this clause (iii) may in 
the discretion of the Secretary be waived with respect to the period of 
occupancy or completion of any such new residential structures. The ^ 
Secretary is hereby authorized and directed, with respect to mobile 
homes to be financed under this section, to (i) prescribe minimum 
property standards to assure the livability and durability of the mobile 
home and the suitability of the site on which the mobile home is to be 
located; and (ii) obtain assurances from the borrower that the mobile 
home will be placed on a site which complies with the standards pre- 
scribed \r^ the Secretary and with local zoning and other applicable 
local requirements. 

Alterations, repairs, and improvements upon or in connection with 
existing structures may include the provision of fire safety equipment, 
energy conserving improvements, or the installation of solar energy 
systems. As used in this section — 

(1) the term "fire safety equipment" means any device or facil- 
ity which is designed to reduce the risk of personal injury or 
property damage resulting from fire and is in conformit}^ with 
such criteria and standards as shall be prescribed by the 
Secretary ; 
"(2) the term "energy conserving improvements" means the pur- 
chase and installation of weatherization materials as defined in section 
412(9) of the Energy Conservation in Existing Buildings Act of 
1976;^ and 

"(3) the term "solar energy" means any addition, alteration, or im-- 
provement to an existing or new structure which is designed to utilize' 

1 Sec. 108(c)(8). Housincr and Urban Development Act of 1969, Public Law 91-15'> 
approved December 24, 1969, 83 Stat. 379, 380, Inserted "other than mobile homes" 

2 Amended to read as set forth in the text by sec. 101(a) of the Housing Act of 1956, 
Public Law 1020. 84th Congress, approved August 7, 1956, 70 Stat. 1091. As originally 
added to this section by Public Law 405. 84th Congress, approved February 10 1956 
70 Stat. 11, this proviso provided that clause (iii) should not be mandatory with respect 
to the period of occupancy or completion of new residential structures where the structures 
had been damaged in Ji major disaster. 

3 This sentence inserted by sec. 103(c) (4). Housing and Urban Development Act of 1969 
Public Law 91-152. approved December 24, 1969, 83 Stat 379; 380. ' 
,.«* A™^'^^^^^ ^y ^®^- 2*1' National Energy Conservation Policy Act, 'Public Law 95-619, 
92 Stat. 3206, approved November 9, 1978. 

176 ' 



NATIONAL HOUSING ACT §2 

wind ener^' or solar energ;v^ either of the active type based on me- 
chanically forced energy transfer or of the passive tvpe based on con- 
vective, conductive, or radiant energy transfer or some combination of 
these types to reduce the energy requirements of that structure from 
other energy sources, and which is in conformity with such criteria 
and standards as shall be prescribed by the Secretary in consultation 
with the Secretary of Energy.^ 

(b) No insurance shall.be granted under this section to any such 
financial institution with respect to any obligation representing any 
such loan, advance of credit, or purchase by it (1) if the amount of 
such loan, advance of credit, or purchase exceeds $15,000 - except ^ 
that an obligation financing the purchase of a mobile home may be in 
an amount not exceeding 5^516,000 ($24,000 ^ in the case of a mobile 
home composed of two or more modules) ; (2) if such obligation has a 
maturity in excess of fifteen ^ years and thirty-two days, except that ^ 
such maturity limitation shall not apply if such loan, advance of 
credit, or purchase is for the purpose of financing the construction of 
a new structure for use in whole or in part for agricultural purposes: 
Provided^ That an obligation financing the purchase of a mobile 
home may have a maturity not in excess of fifteen years and thirty-two 
days (twenty-three years and thirty-two days in the case of a mobile 
home composed of two or more modules) ; * or (3) unless the obliga- 
tion bears such interest, has such maturity, and contains such other 
terms, conditions, and restrictions as the Secretary shall prescribe, in 
order to make credit available for the purposes of this title : Provided^ 
That any such obligation with respect to which insurance is granted 
under this section on or after sixty days from the date of the enactment 
of this proviso shall bear interest, and insurance premium charges, not 
exceeding (A) an amount with respect to so much of the net proceeds^ 

1 Sec. 309(b)(1) of Housing and Community Development Act of 1974. Public Law 
93-383, 88 Stat. 633. approved August 22. 1974, added this new paragraph. Amended by 
Sec. 241, National Energy Conservation Policy Act, Public Law 95-619, 92 Stat. 3206, 
approved November 9, 1978. 

3 Sec. 308. Housing and iTban Development Act of 1968. Public Law 90-448, approved 
August 1. 1968. 82 Stat. 476. 509, substituted ".1:5,000" for "$3,500." Sec. 101(b) of the 
Housing Act of 1956. Public Law 1020. 84th Congress, approved August 7, 1956, 70 Stat. 
1091. substituted "exceeds $3,500" for "made for the purpose of financing the alteration, 
repair, or improvement of existing structures exceeds $2,500. or for the purpose of financing 
the construction of new structures exceeds $3,000". Sec. .309(a) fl) of Housing and Com- 
munity Development Act of 1974. Public Law 93-383, 88 Stat. 633, approved August 22. 
1974. substituted "$10,000" for "$5,000". Housing and Communitv Development Act of 
1977. Public Law 95-128 approved October 12, 1977, substituted "$15,000" for "$10,000". 

3 Sec. 103(c)(5), Housing and T'rban Development Act of 1969. Public Law 91-152, 
approved December 24. 1969. 83 Stat. 379, 380, inserted the $10,000 ceiling on an obli- 
gation financing the purchase of a mobile home. 

* Sec. 113(1). Housing and Urban Development Act of 1970. Public Law 91-609. ap- 
proved December 31. 1970. 84 Stat. 1770, 1773, inserted the $15,000 ceiling on an obliga- 
tion financing the purchase of a m.obile home composed of two or more modules. Public 
Law 94-173. 89 Stat. 1027. approved December 23. 1975. amended section 2(b)(1) of the 
National Housine Act bv striking: out "$10,000 ($15,000" and insertine in lieu thereof 
"$12,500 ($20,000", Housing and Communitv Development Act of 1977, Public Law 95-128 
approved October 12, 1977, substituted "$16,000" for "$12,500" and ("$24,000" for 
"$20,000". 

^ Housing and Communitv Development Act of 1977, Public Law 95-128, approved 
October 12. 1977. substituted "fifteen" for "twelve". 

«Spc. S00(a)(2) of Housine and Communitv Development Art of 1974, Public Law 
93-383. 88 Stat. 633. anproved Ancrust 22. 1974. amended see. (b) (2). 

' This proviso added bv sec. 103(c)(6). Honsinc and Urban Development Act of 1969. 
Public Law 91-152. 83 Stat. 379. 380. approved December 24. 1969. 

8 Sec. 309<'a)(3) of Housincr and Communitv Development Act of 1974. Public Law 
9*^-383. ,99 Stat. 633. approved Aueust 22. 1974. deleted the words "twelve years and 
thirty-two days (fifteen years and thirty-two davs In the case of a mobile home composed 
of two or moro modules)' and Inserted in lieu thereof "fifteen vears and thirty-two day.s". 
Housing and Communitv Development Act of 1977, Public Law 95-128, approved Octo- 
ber 12. 1977. amended this proviso as set for*^h. 

"This proviso added bv sec. 101(c) of the Housing Act of 1956, Public Law 1020, 84th 
Congress approved August 7. 1956. 70 Stat. 1091. 



177 



§2 NATIONAL HOUSING ACT 

thereof as does not exceed $2,500, equivalent to $5.50 ^ discount per $100 
of original face amount of a one-year note payable in equal monthly 
installments, plus (B) an amount, with respect to any portion of the net 
proceeds thereof in excess of $2,500, equivalent to $4.50 ^ discount per 
$100 of original face amount of such a note: Provided ^ further^ That 
the amounts referred to in clauses (A) and (B) of the preceding pro- 
viso, when correctly based on tables of calculations issued by the Sec- 
retary or adjusted to eliminate minor errors in computation in accord- 
ance with requirements of the Secretary, shall be deemed to comply 
with such proviso : Provided further^ That insurance may be granted to 
any such financial institution with respect to any obligation not in ex- 
cess of $37,500 ^ nor an average amount of $7,500 per family unit and 
having a maturity not in excess of fifteen years and thirty-two days 
representing any such loan, advance of credit, or purchase made by it if 
such loan, advance of credit, or purchase is made for the purpose of 
financing the alteration, repair, improvement, or conversion of an 
existing structure used or to be used as an apartment house or dwelling 
for two or more families : Provided further^ That any obligation with 
respect to which insurance is granted under this section on or after 
July 1, 1939, may be refinanced and extended in accordance with such 
terms and conditions as the Secretary may prescribe, but in no event 
for an additional amount or term in excess of the maximum provided 
for in this subsection. Notwithstanding the foregoing limitations, any 
loan to finance fire safety equipment for a nursing home, extended 
health care facility, intermediate health care facility, or other com- 

E arable health care facility may involve such principal amount and 
ave such maturity as the Secretary may prescribe.^ 
Notwithstanding the limitations contained in the first proviso to 
clause (2) of the preceding sentence, a loan financing the purchase of 
a mobile home and an undeveloped lot on which to place the home 
shall — 

(A) involve such an amount not exceeding (i) the maximum 
amount under clause (1) of the first paragraph of this subsection, 
and (ii) such amount not to exceed $5,000 as may be necessary to 
cover the cost of purchasing the lot ; and 

(B) have a maturity not exceeding fifteen years and thirty- 
two days (twenty-three ^ years and thirty-two days in the case of a 
mobile home composed of two or more modules) . 

A loan financing tne purchase of a mobile home and a suitably 
developed lot on which to place the home shall — 

(A) involve such an amount not exceeding (i) the maximum 
amount under clause (1) of the first paragraph of this subsection, 
and (ii) such amount not to exceed $7,500 as may be necessary to 
cover the cost of purchasing the lot ; and 

1 Sec. 308, Housing and Urban Development Act of 1968. Public Law 90-448. approved 
AnpTUst 1. 1968, 82 Stat. 476, 509, substituted "5.50" for ",$5". 

3 Sec. 308. Housing and Urban Development Act of 1968. Public Law 90-448, approved 
Auffust 1, 1968, 82 Stat. 476, 500. substituted "S4.50" for "$4". 

3 This proviso added by sec. 101(c) of the Housing Act of 1956, Public Law 1020, 84th 
Conarress. approved August 7. 1956, 70 Stat. 1091. 

"Sec. 101(b) of the Housing Act of 1956. Public Law 1020, 84th Congress, approved 
August 7, 1956, 70 Stat. 1091, substituted "$15,000 for an average amount of $2,500 per 
family unit" for "$30,000", Sec. 309(a)(4) of Housing and Community Development Act 
of 1974, Public Law 93-383, 88 Stat. 633, approved August 22, 1974, substituted "$25,000" 
for "$15,000". "$5,000" for "$2,500", and "twelve years" for "seven years". Sec. 320. 
Housing and Community Development Amendments of 1978, Public Law 95-557, 92 Stat. 
2080, approved October 31, 1978, substituted "$37,500" for "$25,000", "$7,500" for 
"$5,000" ; and "fifteen" for "twelve". 

"Sec. 309(b)(3) of Housing and Community Development Act of 1974, Public Law 
• 93-383. 88 Stat. 633. approved August 22. 1974. added this last sentence. 

•Amended by Housing and Community Development Act of 1977, Public Law 95-128, 
approved October 12, 1977 to read "twenty-three" in lieu of "twenty". 

178 



NATIONAL HOUSING ACT §2 

(B) have a maturity not exceeding fifteen years and thirty- 
two days (twenty-tiiree ^ yerd's and thiily-t\70 days in the case of a 
mobile home composed of two or more modules) . 
A loan financing the purchase, by an owner of a mobile home 
which is the principal residence of that owner, of only a lot on which 
to place that mobile home shall — 

(A) involve such an amount as may be necessary to cover the 
cost of purchasing the lot but not exceeding (i) $5,000 in the case 
of an undeveloped lot, or (ii) $7,500 in the case of a developed 
lot : and 

(B) have a maturity not exceeding ten years and thirty-two 



A mobile home lot loan may be made only if the owner certifies that he 
will place his mobile home on the lot acquired with such loan within 
six months after the date of such loan.^ 
A loan financing the preservation of a historic structure shall — 

(1) involve an amount not exceeding $15,000 per family unit; 
and 

(2) have a maturity not exceeding fifteen years and thirty-two 
days.^ 

Because of prevailing higher costs, the Secretary may, by regula- 
tion, in Alaska, Guam, or Hawaii, increase any dollar amount limita- 
tion on mobile homes or mobile home lot loans contained in this 
subsection by not to exceed 40 per centum.* 

(c) (1) Notwithstanding any other provision of law, the Secretary 
shall have the power, under regulations to be prescribed by him and 
approved by the Secretary of the Treasury, to assign or sell at public 
or private sale, or otherwise dispose of, any evidence of debt, contract, 
claim, personal property, or security assigned to or held by him in 
connection with the payment of insurance heretofore or hereafter 
granted under this section, and to collect or compromise all obligations 
assi^ed to or held by him and all legal or equitable rights accruing 
to liim in connection with the payment of such insurance until such 
time as such obligations may be referred to the Attorney General for 
suit or collection. 

(2) The Secretary is authorized and empowered (a) to deal with, 
complete, rent, renovate, modernize, insure, or sell for cash or credit 
in his discretion, and upon such terms and conditions and for such 
consideration as the Secretary shall determine to be reasonable, any 
real or ^ personal property conveyed to or otherwise acquired by him 
in connection with the payment of insurance heretofore or hereafter 
granted under this title and (b) to pursue to final collection, by way 
of compromise or otherwise, all claims against mortgagors assigned by 
mortgagees to the Secretary in connection with such real or ^ personal 
property by way of deficiency or otherwise: Provided^ That section 
3709 of the Revised Statutes shall not be construed to apply to any 
contract of hazard insurance or to any purchase or contract for services 

iHonsincr and Commnnitr Pevelopnent Act of 1977, Public Law 95-128, approved 
October 12. 1977. substituted "twenty-three" in lieu of "twenty". 

2 See. 309(d) of Housinfij and Community Development Act of 1974. Public Law 9.3-383, 
88 Stat. 633, approved Au^ist 22, 1974, amended section 2(b) of the National Housing 
Act. 

3 Sec. 4(a)(2) of Emersrency Home Purchase Assistance Act of 1974, Public Law 
&3-449. 88 Stat. 1304. added this paragraph concerning: historic structures. 

* Honsinjr and Community Development Act of 1977, Public Law 95-128, approved 
October 12. 1077. inserted tlii.s' paragraph. 

5 Sec. 103(c) (7). Housing: and Urban Development Act of 1969, Public Law 91-152, 
approved December 24, 1969, 83 Stat. 379, 380, Inserted "or personar'. 

179 



§3 NATIONAL HOUSING ACT 

or supplies on account of such property if the amount thereof does not 
exceed $1,000. The power to convey and to execute in the name of the 
Secretary deeds of conveyance, deeds of release, assignments and satis- 
factions of mortgages, and any other written instrument relating to 
real or ^ personal property or any interest therein heretofore or here- 
after acquired by the Secretary pursuant to the provisions of this title 
may be exercised by an officer appointed by him without the execution 
of any express delegation of power or power of attorney : Provided, 
That nothing in this paragraph shall be construed to prevent the Sec- 
retary from delegating such power by order or by power of attorney, 
in his discretion, to any officer or agent he may appoint. 

(d) The Secretary is authorized and empowered, under such regula- 
tions as he may prescribe, to transfer to any such approved financial 
institution any insurance in connection with any loans and advances 
of credit which may be sold to it by another approved financial 
institution. 

(e) The Secretary is authorized to waive compliance with regula- 
tions heretofore or hereafter prescribed by him with respect to the 
interest and maturity of and the terms, conditions, and restrictions 
under which loans, advances of credit, and purchases may be insured 
under this section and section 6, if in his judgment the enforcement of 
such regulations would impose an injustice upon an insured institution 
which has substantially complied with such regulations in good faith 
and refunded or credited any excess charge made, and where such 
waiver does not involve an increase of the obligation of the Secretary 
beyond the obligation which would have been involved if the regula"^- 
tions had been fully complied with. 

(f) The Secretary shall fix a premium charge for the insurance 
hereafter granted under this section, but in the case of any obligation 
representing any loan, advance of credit, or purchase, such premium 
charge shall not exceed an amount equivalent to 1 per centum per 
annum of the net proceeds of such loan, advance of credit, or purchase, 
for the term of such obligation, and such premium charge shall be 
payable in advance by the financial institution and shall be paid at 
such time and in such manner as may be prescribed bv the Secretarv. 

^ (g) 2 Any payment for loss made to an approved financial institu- 
tion under this section shall be final and incontestable after two vears 
from the date the claim was certified for payment by the Secretary, 
m the absence of fraud or misrepresentation on the part of such institu- 
tion, unless a demand for repurchase of the obligation shall have been 
made on behalf of the United States prior to the expiration of such 
two-year period. 

(h) The Secretary is authorized and directed to make such rules 
and regulations as may be necessary to carry out the provisions of 
this title. 

LOAXS TO FINANCIAL INSTITUTIOXS 

Sec. 3. Repealed.^ 



91-152, ap- 



^.^^^i'Vv-^^^^^J^^i- Housing and Urban Development Act of 196q Puhlio Tnw 
proved December 24, 1969 83 Stat. 379. 380. inserted "or personal'*' 
app?oved'julTl2'°19%V7iitfi? 'oL V^l^^^ ^^^ housing Act of 1957. Public Law 83-104. 
afte^ DecSr "^l iq-.7 11^^^^ 7/»s anplicable only to pavments for lossp. made 

approA^d S^ntpm W 2 1^^^^ the Housing Act of 1964. Public Law 88-560. 

for bosses. ' ' ^*^*- '^^' ™^^^ *^^ subsections applicable to all payments 

3 Repealed by Public Law 486. 74th Congress, approved April 3, 1936, 49 Stat. 11S7. 



180 



NATIONAL HOUSING ACT §4 

ALLOCATION OF FUNDS 

Sec. 4. For the purposes of carrying out the provisions of this title 
and titles II and III [the Reconstruction Finance Corporation shall 
make available to the Administrator such funds as he may deem 
necessary, and the amount of notes, debentures, bonds, or other such 
obligations Avhich the Corporation is authorized and empowered to 
have outstanding at any onetime under existing law is hereby increased 
by an amount sufficient to provide such funds : ^ Provided^ That] the 
President, in his discretion, is authorized to provide such funds or any 
portion thereof by allotment to the Secretary from any funds that 
are available, or may hereafter be made available, to the President 
for emergency purposes. 

Sfx\ 5. Repealed. - 

Sec. 6. Repealed.-^ 

TAXATION 

Sec. 7. Nothing in this title shall be construed to exempt any real 
property acquired and held by the Secretary in connection with the 
payment of insurance heretofore or hereafter granted under this title 
from taxation by any State or political subdivision thereof, to the 
same extent, according to its value, as other real property is taxed. 

INSURANCE OF MORTGAGES 

Sec. 8. (a) To assist in providing adequate housing for families of 
low and moderate income, particularly in suburban and outlying 
areas, this section is designed to supplement systems of mortgage 
insuiance uiivlcr other provisions of the National Housing Act by 
making feasible the insurance of mortgages covering properties m 
areas where it is not practicable to obtain conformity with many of 
the requirements essential to the insurance of mortgages on housing m 
built-up urban areas. The Secretary is authorized upon application 
by tlie moitgagce, to insure, as hereinafter provided, any mortgage 
fas defined in section 201 of this Act) offered to him which is eligible 
for insurance as hereinafter provided, and, upon such terms as the 
Secrofarv may prescribe, to make commitments for the insuring 
of sucli mortgages prior to the date of their execution or disburse- 
ment thereon : Prov.^ded^ That the aggregate amount of principal 
obligations of all mortgages insured under this section and outstand- 
ing at any one time shall not exceed $100,000,000, except that with the 
aiipi'oval of the President such aggregate amount may be increased 
at any time or times by additional amounts agsfregating not more than 
$150.1)00,000 upon a determination by the President, taking into ac- 
count the general effect of any such increase upon conditions in the 
building industry and upon the national economy, that such increase 
is in tlie public interest: * And provided further^ That no mortgage 

1 So \\n\c\\ of sec. 4 as rflntes to the Reconstruction Finance Corporation (text in 
brackets) repealed by sec. 206 of Public Law 132. 80th Congress, approved June 30, 1947, 
01 Stat. 202. 

2 Repealed by sec. R02(b) of the Housing Act of 1954, Public Law 560, 83d Congress, 
approved August 2. 19."'j4. 68 Stat. 590 643. 

sRepe.ilod by Public Law 111, 76th Congress, approved June 3, 1939, 53 Stat. 804. 

* See also sec. 217. 

5 This proviso added bv sec. 103 of the Housine Act of 1954. Public Law 560. 83d Con- 
press, unproved August 2. 1954. 68 Stat. 590. 591. See sec. 203(h) and 203(i) of the 
National Housing Act added by the Housing Act of 1954. 



181 



jg NATIONAL HOUSING ACT 

shall be insured under this section after the effective date of the Hous- 
ing Act of 1954, except pursuant to a commitment to insure issued 
on or before such date. 

(b) To be eligible for insurance under this section, a mortgage 

shall — -, 

(1) have been made to, and be held by, a mortgagee approved 
by the Secretary as responsible and able to service the mortgage 
properly; , . . . , 

(2) ^ involve a principal obligation (including such initial 
service charges, appraisal, inspection, and other fees as the Sec- 
retary shall approve) in an amount not to exceed $5,700, and 
not to exceed 95 per centum of the appraised value, as of the date 
the mortgage is accepted for insurance, of a property upon which 
there is located a dwelling designed principally for a single-family 
resident, and which is approved for mortgage insurance prior to 
the beginning of construction: Provided^ That the mortgagor 
shall be the owner and occupant ^ of the property at the time of 
insurance and shall have paid on account of the property at least 
5 per centum of the Secretary's estimate of the cost of acqui- 
sition in cash or its equivalent, or shall be the builder constructing 
the dwelling, in which case the principal obligation shall not 
exceed 85 per centum of the appraised value of the property or 
$5,100 : Provided further^ That the Secretary finds that the proj- 
ect with respect to which the mortgage is executed is an ac- 
ceptable risk, giving consideration to the need for providing 
adequate housing for families of low and moderate income par- 
ticularly in suburban and outlying areas : And. provided further^ 
That, where the mortgagor is the owner and occupant of the prop- 
erty and establishes (to the satisfaction of the Secretary) that 
his home, which he occupied as an owner or as a tenant, was de- 
stroyed or damaged to such an extent that reconstruction is re- 
quired as a result of a flood, fire, hurricane, earthquake, storm 
or other catastrophe, which the President, pursuant to sections 
102(2) 3 and 301 of the Disaster Eelief Act of 1974 has deter- 
mined to be a major disaster, such maximum dollar limitation may 
be increased by the Secretary from $5,700 to $7,000, and the per- 
centage limitation may be increased by the Secretary from 95 
per centum to 100 per centum of the appraised value ; * 

(3) have a maturity satisfactory to the Secretary but not to 
exceed thirty years from the date of insurance of the mortgage ; 

(4) contain complete amortization provisions satisfactory to 
the Secretary requiring periodic payments by the mortgagor 
not in excess of his reasonable ability to pay as determined by the 
Secretary ; 

(5) bear interest (exclusive of premium charges for insurance 
and service charges, if any) at not to exceed 5 per centum per 

1 Par. (2) amended to read as set forth in the t^-xt by sec. 2 of the Housing Amend- 
ments of 195.3, Public Law 94, 83d Congress, approved June 30, 1953, 67 Stat. 121. 

a See sec. 216 of the National Housing Act. 

« Sec. 301(b), Disaster Relief Act of 1970, Public Law 91-606, approved December 31, 
1970, 84 Stat. 1744, 1758, deleted at this point the reference to Federal disaster assistance 
under Public Law 875, Eighty-first Congress, and substituted the reference to sec. 102(1) 
of the Disaster Relief Act of 1970. Sec. 602(b) of Disaster Relief Act of 1974. Public Law 
93-288, 88 Stat. 143, approved May 22, 1974, substituted "sections 102(2) and 301 of the 
Disaster Relief Act of 1974" for "section 102(1) of the Disaster Relief Act of 1970". 

* See sec. 203(h) of the National Housing Act as added by the Housing Act of 1954, 
Public Law 560. 83d Congress, 68 Stat. 590. 592. 

182 



NATIONAL HOUSING ACT §8 

annum on the amount of the principal obligation outstanding at 
any time ; 

(6) provide, in a manner satisfactory to the Secretary, for the 
application of the mortgagor's periodic payments (exclusive of 
the amount allocated to interest and to the premium charge which 
is required for mortgage insurance as hereinafter provided and 
to the service charge, if any) to amortization of the principal of 
the mortgage ; and 

(7) contain such terms and provisions with respect to insurance, 
repairs, alterations, payment of taxes, service charges, default re- 
serves, delinquency charges, foreclosure proceedings, anticipation 
of maturity, and other matters as the Secretary may in his discre- 
tion prescribe. 

(c) The Secretary is authorized to fix a premium charge for the 
insurance of mortgages under this section, but in the case of any 
mortgage, such charge shall not be less than an amount equivalent to 
one-half of 1 per centum per annum nor more than an amount equiva- 
lent to 1 per centum per annum of the amount of the principal obliga- 
tion of the mortgage outstanding at any time, without taking into 
account delinquent payments or prepayments. Such premium charges 
shall be payable by the mortgagee, either in cash or in debentures 
issued by the Secretary under this section at par plus accrued 
interest, in such manner as may be prescribed by the Secretary: 
Provided, That the Secretary may require the payment of one or 
more such premium charges at the time the mortgage is insured, at 
such discount rate as he may prescribe not in excess of the interest rate 
specified in the mortgage. If the Secretary finds, upon the presentation 
of a mortgage for insurance and the tender of the initial premium 
charge or chai-gos so required, that the mortgage complies with the 
provisions of tliis section, such mortgage may be accepted for insurance 
by endorsement or otherwise as tlie Secretary may prescribe. In the 
event that the principal obligation of any mortgage accepted for 
insurance under this section is paid in full prior to the maturity date, 
the Secretary is further authorized, in his discretion, to require the 
payment by the mortgagee of an adjusted premium charge in such 
amount as the Secretary determines to be equitable, but not in ex- 
cess of tlie aggregate amount of the premium charges that the mort- 
gagee would otherw^ise have been required to pay if the mortgage had 
continued to be insured until such maturity date; and in the event 
that the principal obligation is paid in full as herein set forth, the 
Secretary is authorized to refund to the mortgagee for the account 
of the mortgagor all, or such portion as he shall determine to be 
equitable, of the current unearned premium charges theretofore paid. 

(d) The Secretary may, at any time under such terms and condi- 
tions as he may prescribe, consent to the release of the mortgagor from 
his liability under the mortgage or the credit instrument secured 
thereby, or consent to the release of parts of the mortgaged property 
from the lien of the mortgage. 

(e) Any contiact of insurance executed by the Secretary under 
this section shall be conclusive evidence of the eligibility of the mort- 
gage for insurance, and the validity of any contract of insurance so 
executed shall be incontestable in the hands of an approved mortgagee 
from the date of the execution of such contract, except for fraud or 
misrepresentation on the -part of such approved mortgagee. 

183 



§ 9 and § 201 NATIONAL HOUSING ACT 

(f) In any case in which the mortgagee under a mortgage insured 
under this section shall have foreclosed and taken possession of the 
mortgaged property in accordance with the regulations of, and within 
a period to be determined by, the Secretary, or shall, with the con- 
sent of the Secretary, have otherwise acquired such property from 
the mortgagor after default, the mortgagee shall be entitled to receive 
the benefits of the insurance as provided in section 204(a) of this Act 
with respect to mortgages insured under section 203(b)(2)(D) of 
tliis Act. 

(g) Subsections (c), (d), (e), (f), (g), (h), (j), and (k) ^ of sec- 
tion 204 of this Act shall be applicable to mortgages insured under this 
section except that all references therein to the Mutual Mortgage In- 
surance Fund or the Fund shall be construed to refer to the General 
Insurance Fund, and all references therein to section 203 shall be con- 
strued to refer to this section: Provided, That debentures issued in 
-connection with mortgages insured under this section 8 shall have the 
•same tax exemption as debentures issued in connection with mortgages 
insured under section 203 of this Act. 

Sec. 9. The provisions of sections 2 and 8 shall be applicable in the 
several States and Puerto Rico, tlie District of Cohimbia. Guam, the ^ 
Trust Territory of the Pacific Islands, and the Virgin Islands. 

TITLE II— MORTGAGE INSURANCE 

DEFINITIONS 

Sec. 201. As used in section 203 of this title — 

(a) The term "mortgage" means a first mortgage on real estate, in 
fee simple, oi* on a leasehold (1) under a lease for not less than ninety- 
nine years which is renewable or (2) under a lease having a period 
of not less than fifty years to run from the date the mortgage was 
executed; and the term "first mortgage" means such classes of first 
liens as are commonly given to secure advances on, or the unpaid pur- 
chase price of, real estate, under the laws of the State in which the 
real estate is located, together with the credit instrument, if any, 
secured thereby. 

(b) The term "mortgagee" includes the original lender under a 
mortgage, and his successors and assigns approved by the Secretary ; 
and the term "mortgagor" includes the original borrower under a 
mortgage and his successors and assigns. 

(c) The term "maturity date" means the date on which the mort- 
gage indebtedness would be extinguished if paid in accordance with 
periodic payments provided for in the mortgage. 

(d) The term "State" includes the several States and Puerto Rico, 
the District of Columbin. Guam, the - Trust Territory of the Pacific 
Islands, and the Virgin Islands. 

MTJTUAL MORTGAGE INSURANCE FUND 

Sec. 202. There is hereby created a Mutual Mortgage Insurance- 
Fund (hereinafter referred to as the "Fund"), which shall be used by 
the Secretary as a revolving fund for carrying out the provisions 
of this title with respect to mortgages insured under section 203 as 
hereinafter provided, and there shall be allocated immediately to such 

1 See. nn(a>, Honsin? Act of lOoO. PMblic Law 86-372, approved September 23. 1959, 
7S Stat. fi')4. fi64. inserted "(j)" and "(k)". 

3 Sec. 403(c), Housinc: and Urban Development Aot of 1969. Public Law 91-1 .^12. annroved 
December 24. 1969, 83 Stat. 379, 395, inserted "the Trust Territory of the Pacilic Islands.". 

184 



NATIONAL HOUSING ACT §203 

Fund the sum of $10,000,000 out of funds made available to the Sec- 
retary for the purposes of this title. 

INSURANCE or MORTGAGES 

Sec. 203. (a) The Secretary is authorized, upon application by 
the mortgagee, to insure as hereinafter provided any mortgage offered 
to him which is eligible for insurance as hereinafter provided, and, 
upon such terms as the Secretary may prescribe, to make commit- 
ments for the insuring of such mortgages prior to the date of their 
execution or disbursement thereon.^ 

(b) To be eligible for insurance under this section a mortgage 
shall — 

(1) Have been made to, and be held by, a mortgagee approved by 
the Secretary as responsible and able to service the mortgage properly. 

(2) Involve a principal obligation (including such initial service 
charges, appraisal, inspection, and other fees as the Secretary shall 
approve) m an amount not to exceed $60,000 ^ in the case of property 
upon which there is located a dwelling designed principally for a one- 
family residence ; or $65,000 ^ in the case of a two-family residence 
(whether or not such one- or two-family residence may be intended 
to be rented temporarily for school purposes) ; or $65,000 ^ in the case 
of a three-family residence ; or $75,000 ^ in the case of a four-family 
residence; and (except^ as provided in the next to the last sentence 
of this paragraph) not to exceed an amount equal to the sum of (i) 97 
per centum * of $25,000 of the appraised value of the property, as of the 
date the mortgage is accepted for insurance, and (ii) ^ 95 per centum 
of such value in excess of $25,000.^ If the mortgagor is a veteran ^ and 
the mortgage to be insured under this section covers property upon 

1 Sec. 604(b), Housing Act of 1961, Public Law 87-70, approved June 30, 1J>61, 75 Stat. 
149, 177, deleted the remainder of this sentence which read : "Provided, That the aggregate 
amount of principal obliprations of all mortprasres insured under this title and outstanding 
at any one time shall not exceed $7,750,000,000 except that with the approval of the 
President such aggregate amount may be increased at any time or times by additional 
amounts aggregating not more than .$1.2.*i0,000,000 upon a determination by the Presi- 
dent, taking into account the general effect of any such increase upon conditioris in the 
building industry and upon the national economy, that such increase is in the public 
interest." 

2 Sec. 113fa)(l). Housing nnd Urban Development Act of 1969, Public Law 91-1.^2. 
approved December 24. 1969. 83 Stat. 379. 383. increased the dollar limits on one-family 
homes from "$30,000" to "$33,000". on two- and three-family homes from "$32.o00" to 
"$35,750". and on four-familv homes from "$37,500" to "$41,250". Sec. 302(a) of the 
Housing and Community Development Act of 1974, Public Law 93-383, 88 Stat. 633, 
approved August 22. 1974. substituted "$45,000" for "$33,000". "$48,750" for "$35,750". 
and "$56,000" for "$41,250". each place it appears. Housing and Community Development 
Act of 1977. Public Law 9.5-128 approved October 12, 1977 substituted "$60,000" for 
"$45,000", "$65,000" for "$48,750", and "$75,000" for "$56,000". 

3 Sec. 206(a)(1). Housing and Urban Development Act of 1965. Public Law 89-117, 
approved August 10. 1965. 79 Stat. 451. 466. inserted this parenthetical phrase. 

* Housing and Community Development Act of 1977. Public Law 95-128, approved 
October 12, 1977, deleted following "per centum" the following language "(but in any 
case where the dwelling is not approved for morteage insurance prior to the beginning 
of construction unless the construction of the dwelling was completed more than 1 year 
prior to the application for mortgage insurance or the dwelling was approved for guarant.v, 
insurance, or direct loan under chapter 37 of title 38, United States Code, prior to the 
beginning of construction, 90 per centum)". 

5 Housing and Community Development Act of 1977, Public Law 95-128. approved 
October 12. 1977, deleted clause (ii) and (iii) which read "ii) 90 per centum of such value 
in excess of $25,000 but not in excess of $35,000 and (iii) 80 per centum of such value in 
excess of $35,000", and inserted in lieu thereof the language as set forth in the text. 

8 Sec. 301, Demonstration uities and Metropolitan Development Act of 1966, Public Law 
89-764, approved November 3, 1966, 80 Stat. 1255, 12^6, deleted at this point the words 
"who has not received any direct, guaranteed, or insured loan under laws administered by 
the Veterans* Administration for the purchase, construction, or repair of a dwelling (in- 
cluding a farm dwelling) which was to be owned and occupied by him as his home." with 
the exception of this deletion, this sentence and the following sentence were added by 
sec. 206(a) (2). Housing and Urban Development Act of 1965, Public Law 89-117, approved 
August 10. 1965. 79 Stat. 451. 466. 



185 

45-704 0-79-13 



S 203 NATIONAL HOUSING ACT 

which there is located a dwelling designed principally for a one- 
family residence, the principal obligation may be in an amount equal 
to the sum of (i) 100 per centum of $25,000 of the appraised value of 
the property as of the date the mortgage is accepted for insurance, and 
(ii) 95 per centum of such value in excess of $25,000.^ Notwith- 
standing any other provision of this section, in any case where the 
dwelling is not approved for mortgage insurance prior to the begin- 
ning of construction, such mortgage shall not exceed 90 per centum of 
the entire appraised value of the property as of the date the mortgage 
is accepted for insurance, unless the dwelling was completed more than 
one year prior to the application for mortgage insurance, or the dwell- 
ing was approved for guaranty, insurance, or a direct loan under 
chapter 37 of title 38, United States Code, prior to the beginning of 
construction.^ As used herein, the term "veteran" means any person 
who served on active duty in the armed forces of the United States 
for a period of not less than 90 days (or is certified by the Secretary of 
Defense as having performed extra-hazardous service) , and who was 
discharged or released therefrom under conditions other than dis- 
honorable. 

Notwithstanding any other provision of this paragraph, the amount 
which may be insured under this section may be increased by up to 
20 percent if such increase is necessary to account for the increased 
cost of the residence due to the installation of a solar energy system 
(as defined in subparagraph (3) of the last paragraph of section 2(a) 
of this Act) therein.^ 

(3) ^ Have a maturity satisfactory to the Secretary, but not to 
exceed, in any event, thirty-five years (or thirty years if such mortgage 
is not approved for insurance prior to construction) from the date of 
the beginning of amortization of the mortgage or three-quarters of the 
Secretary's estimate of the remaining economic life of the building 
improvements, whichever is the lesser. 

(4) Contain complete amortization provisions satisfactory to the 
Secretary requiring periodic payments by the mortgagor not in 
excess of his reasonable ability to pay as determined by the Secretary. 

(5) ^ Bear interest (exclusive of premium charges for insurance, > 
and service charges if any) at not to exceed 5 per centum per annum 
on the amou nt of the principal obligation outstanding at any time, or 

^Sec. 102(a), Housing and Urban Development Act of 1969, Public T.aw qi 1^9 
approved December 24. 1969. 83 Stat. 379, substituted ''$25,000'' for -$20 000'' Se^^ 
310 a) 1 of Housing and Community Development Act of 1974 Public Law Qq^SQ ot. 
proved August 22, 1974, 88 Stat. 633, substituted ''$25.000'^or ''|l5?000^' • lie fioff^ ^f^' 
of such Act substituted "$25,000" and "$35,000" for "$15 000" a^d "fefooft-' • q^£? 
310(a) (3) of such Act substituted "$35,000" for "$25,000" -Sec 203 HouS«r?^ Vrl^' 
Development Act of 1965, Public Law 89-117. approved August 10 ^6^^^^ 
previoSs'page'^ "'^ ^" ''°'"°^" ''' "'" ^'' ^^r^tSm'' ;llt^Tl!Ll%lfoltZ^^ 
- See footnote 6 on previous page. 

•''The preceding sentence was added by Sec. 248(a). National Energy Conservation Policy 
Act, Pub. Law 95-619, 92 Stat. 3206. approved November 9. 1978. 

* Immediately prior to amendment by sees. 605(c) and 612(a), Housing Act of 1961. 
Public Law 87-70, approved June 30, 1961, T5 Stat. 149, 178, this paragraph read aa 
follows : 

"(3) Have a maturity satisfactory to the Commissioner, but not to exceed, in any event 
thirty years from the date of the insurance of the mortgage or three-quarters of the Com- 
missioner's estimate of the remaining economic life of the building improvements, which- 
ever Is the lesser." 

5 Immediately prior to amendment by sec. 106, Housing Act of 1954, Public Law 560 83d 
Congress, approved August 2, 1954, 68 Stat. 590, 591, sec. 203(b)(5) read as follows: 

"(5) Bear Interest (exclusive of premium charges for insurance) at not to exceed 
5 per centum per annum on the amount of the princioal obligation outstanding at any 
time, or not to exceed 6 per centum per annum If the Commissioner finds that in 
certain areas or under special circumstances the mortgage market demands it or 
not to exceed 4 per centum per annum in the case of a mortgage insured under 
paragraph (2) (D) of this subsection, or not to exceed such per centum per annum, 
not in excess of 5 per centum, as the Commissioner finds necessary to meet the 
mortgage market." 

186 



NATIONAL HOUSING ACT §203 

not to exceed such per centum per annum not in excess of 6 per centum 
as the Secretary finds necessary to meet the mortgage market. 

(6) Provide, in a manner satisfactory to the Secretary, for the 
application of the mortgagors periodic payments (exclusive of the 
amount allocated to interest and to the premium charge which is re- 
quired for mortgage insurance as hereinafter provided) to amortiza- 
tion of the principal of the mortgage. 

(7) Contain such terms and provisions with respect to insurance, 
repairs, alterations, payment of taxes, default reserves, delinquency 
charges, foreclosure proceedings, anticipation of maturity, additional 
and secondary liens, and other matters as the Secretary may in his 
discretion prescribe. 

(8) ^ In the case of a mortgagor who is not the occupant of the 
property, have a principal obligation not in excess of an amount equal 
to 85 per centum of the amount computed under the provisions of para- 
ofraph (2) of this subsection: Provided:,^ That such 85 per centum 
limitation shall not be applicable if the mortgagor and mortgagee 
assume responsibility in a manner satisfactory to the Secretary 
for the reduction of the mortgage by an amount not less than 15 
per centum of the outstanding principal amount thereof in the event 
the mortgaged property is not, prior to the due date of the eighteenth 
amortization payment of the mortgage, sold to a purchaser acceptable 
to the Secretary who is the occupant of the property and who assumes 
and agrees to pay the mortgage indebtedness. 

(9) Be executed by a mortgagor who shall have paid on account 
of the ju-operty (except ^ in a case to which the next to the last sen- 
tence of paragraph (2) applies) at least 3 per centum, or such larger 
amount as the Secretary may determine, of the Secretary's estimate of 
the cost of acquisition in cash or its equivalent : Provided^ That with 
respect to a mortgage executed by a mortgagor who is sixty years of 
age or older as of the date the mortgage is endorsed for insurance or 
with respect to a mortgage meeting the requirements of subsection (i) 
of this section, or* with respect to a mortgage covering a single- 
family home being purchased under the low-income housing demon- 
stration project assisted pursuant to section 207 of the Housing Act of 
1961, the mortgagor's payment required by this subsection may be 
paid by a corporation or person other than the mortgagor under such 
terms and conditions as the Secretary may prescribe. 

(c) ^ The Secretary is authorized to fix premium charges for the 
insurance of mortgages under the separate sections of this title but 
in the case of any mortgage such charge shall be not less than an 
amount equivalent to one-fourth of 1 per centum per annum nor more 

1 Added bv sec. 101(b) of the Housing Act of 1957, Public Law 85-104, approved July 
12. 1957. 71 Stat. 294. 295. 

2 Proviso ndded by sec. 102(b), Housing Act of 1959, Public Law 86-372, approved 
September 23. 1959. 73 Stat. 654. 

3 Sec. 206rb). Housins: and Urbnn Development Act of 19G5. Public Law 89-117, 
approved August 10. 1965, 79 Stat. 451, 466, Inserted this parenthetical phrase. 

* This cl.Tise inserted bv sec. 204. Housing and Urbnn Development Act of 1965, Public 
Law 89-117, approved Au.gust 10, 1965. 79 Stat. 451, 466. 

8 Immediately prior to amendment by sec. 606. Housing Act of 1961, Public Law 87-70, 
approved June 30. 1961, 75 Stat. 149, 178, this sentence read as follows : 

"The Commissioner is authorized to fix a premium charge for the insurance of mortgages 
under this title but in the case of any mortgage such charge shall not be less than an 
amount equivalent to one-half of 1 per centum per annum nor more than an amount equiva- 
lent to 1 per centum per annum of the amount of the principal obligation of the mortgage 
outstanding at any time, without taking into account delinquent payments or prepayments : 
Provided, That a premium charge so fixed and computed shall also be applicable to each 
mortgage insured prior to the date of enactment of the National Housing Act Amendments 
of 1938 in lieu of any premium charge which would otherwise become due after such date 
with respect to such mortgage : Provided further. That In the case of any mortgage de- 
scribed in section 203(b)(2)(B) and accepted for insurance after such date and prior to 
July 1. 1939. the premium charge shall be one-fourth of 1 per centum per annum on such 
outstanding principal obligation." 

187 



§203 NATIONAL HOUSING ACT 

than an amount equivalent to 1 per centum per annum of the amount of 
the principal obligation of the mortgage outstanding at any time, 
without taking into account delinquent payments or prepayments ^''Pro- 
vided^ That premium charges fixed for insurance under subsections (n) 
and (k) are ^ not re(j[uired to be the same as the premium charges for 
mortgages insured under the other provisions of this section, but in no 
case shall premium charges under subsection (n) or (k) ^ exceed 1 per 
centum per annum ^ : Provided, That any reduced premium charge so 
fixed and computed may, in the discretion of the Secretary, also be made 
applicable in such manner as the Secretary shalb prescribe to each in- 
sured mortgage outstanding under the section or sections involved at 
the time the reduced premium charge is fixed. Such premium charges 
shall be payable by the mortgagee, either in cash, or in debentures issued 
by the Secretary under this title at par plus accrued interest, in such 
manner as may be prescribed by the Secretary : Provided * That deben- 
tures presented in payment of premium charges shall represent obliga- 
tions of the particular insurance fund or ^ account to which such pre- 
mium charges are to be credited : Provided further^ That the Secretary 
may require the payment of one or more such premium charges at the 
time the mortgage is insured, at such discount rate as he may prescribe 
not in excess of the mterest rate specified m the mortgage. If the 
Secretary finds upon the presentation of a mortgage for insurance 
and the tender of the initial premium charge or charges so required 
that the mortgage complies with the provisions of this section, such 
mortgage may be accepted for insurance by endorsement or otherwise 
as the Secretary may prescribe; but no mortgage shall be accepted 
for insurance under this section unless the Secretary finds that the 
project with respect to which the mortgage is executed is economically 
sound. In the event that the principal obligation of any mortgage 
accepted for insurance under this title is paid in full prior to the 
maturity date, the Secretary is further authorized in his discretion 
to require the payment by the mortgagee of an adjusted premium 
charge in such amount as the Secretary determines to be equitable, 
but not in excess of the aggregate amount of the premium charges 
that the mortgagee would otherwise have been required to pay if the 
mortgage had continued to be insured until such maturity date; and 
in the event that the principal obligation is paid in full as herein set 
forth, the Secretary is authorized to refund to the mortgagee for the 
account of the mortgagor all, or such portion as he shall determine 
to be equitable, of the current unearned premium charges theretofore 
paid. 

(d) Kepealed.^ 

(e) ^ Any contract of insurance heretofore or hereafter executed by 

1 Sec. 101(c)(2) of the Housing and Community Development Amendments of 1978, 
P.L. 95-557, 92 Stat. 2080 (1978), added subsection (k) to this proviso: 

3 This sentence added by Housing and Community Development Act of 1977, Public Law 
95-128, approved October 12, 1977. 

*This proviso added by sec. 107 of the Housing Act of 1954, Public Law 560. 83d" 
Congress, approved August 2, 1954, 68 Stat. 590, 592. 

5 Sec. 612(a)(2), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 
75 Stat. 149, 180, added "or account." 

« Subsec. (d) of sec. 203 repealed by sec. 106 of the Housing Act of 1957, Public Law 
85-104, approved July 12, 1957, 71 Stat. 294, 297. 

''Immediately prior to amendment by sec. 102(b), Housing Act of 1961, Public Law 
87-70, approved June 30, 1961, 75 Stat. 149, 157. section 203(e) read as follows: 

"(e) Any contract of insurance heretofore or hereafter executed by the Commissioner 
under this title shall be conclusive evidence of the eligibility of the mortgage for insurance, 
and the validity of any contract of insurance so executed shall be incontestable in the 
hands of an approved mortgagee from the date of the execution of such contract, except for 
fraud or misrepresentation on the part of such approved mortgagee." 

188 



NATIONAL HOUSING ACT §203 

the Secretary under this title shall be conclusive evidence of the 
eligibility of the loan or mortgage for insurance, and the validity of 
any contract of insurance so executed shall be incontestable in the 
hands of an approved financial institution or approved mortgagee 
from the date of the execution of such contract, except for fraud or 
misrepresentation on the part of such approved financial institution 
or approved mortgagee. 

(f) Repealed.! 

(g) Repealed.! 

(h) 2 Notwithstanding any other provision of this section, the Sec- 
retary is authorized to insure any mortgage which involves a prin- 
cipal obligation not in excess of $14,400 ^ and not in excess of 100 per 
centum of the appraised value of a property upon which there is lo- 
cated a dwelling designed principally for a single-family residence, 
where the mortgagor is the owner and occupant and establishes (to the 
satisfaction of the Secretary) that his home which he occupied as 
an owner or as a tenant was destroyed or damaged to such an extent 
that reconstruction is required as a result of a flood, fire, hurricane, 
earthquake, storm, riot ^ or civil disorder, or other catastrophe, which 
the President, pursuant to section 102(2) ^ and 301 of the Disaster 
Relief Act of 1974, has determined to be a major disaster. 

(i) ® The Secretary is authorized to insure under this section, any 
mortgage meeting the requirements of subsection (b) of this section, 
except as modified by this subsection, which involves a principal 
obligation not in excess of 75 per centum of the limit on the princi- 
pal obligation applicable to a one-family residence under subsection 



1 Repealed by sec. 109. Hoii.sing Act of 1954, Public Law 560, 83d Congress, approved 
August 2. 1954. 68 Stat. 590. 592. 

2 Added by sec. 110, Housing Act of 1954, Public Law 560, 83d Congress, approved 
August 2. 1954. 68 Stat. 590, 592. 

3 Sec. 113(a)(2). Housing and T'rban Development Act of 1969. Public Lnw 91-152, 
approved December 24, 1969. 83 Stat. 379, 383, substituted "$14,400" for "$12,000". 

* Sec. 1106(d), Housing and Urban Develonment Act of 1968, Public Law 90-448, ap- 
proved August 1, 1968. 82 Stat. 476, 567, inserted "riot or civil disorder," 

"Sec. 301(c), Disaster Relief Act of 1970, Public Law 91-606, approved December 31, 
1970, 84 Stat. 1744. 1758, deleted at this point the reference to Federal disaster assistance 
under Public Law 875, 81st Congress, and substituted the reference to sec. 102(1) of the 
Disaster Relief Act of 1970. Sec. 602(c) of the Disaster Relief Act of 1974. Public 
Law 93-288. 88 Stat. 143. approved May 22. 1974. substituted "sections 102(2) and 301 
of Disaster Relief Act of 1974" for "section 102(1) of the Disaster Relief Act of 1970". 

« Subsec. 203(i) amended to read as set forth in the text by sec. 103 Housing Act 
of 1959. Public Law 86-372. approved September 23. 1959, 73 Stat. 654. 655. except that 
sec. 317, Housing and Urban Development Act of 1968. Public Law 90-448. approved 
August 1, 1968, 82 Stat. 476, 512, substituted "$13,500" for "$12,500", and sec. 205, 
Housing and Urban Development Act of 1965. Public Law 89-117, approved August 10, 
1965, 79 Stat. 451. 466, substituted "$12,500" for "$11,000". 

Immediately prior to amendment by sec. 103, Housing Act of 1959, subsection 203 (i) 
read as follows : 

"(i) The Commissioner is authorized to insure under this section, any mortgage meeting 
the requirements of subsection (b) of this section, except as modified by this subsection, 
which involves a principal obligation not in excess of $8,000 and not in excess of 97 per 
centum of the appraised value of a property located in an area where the Commissioner 
finds it is not practicable to obtain conformity with many of the requirements essential to 
the Insurance of mortgages on housing in built-up urban areas, upon which there is located 
a dwelling designed principally for a single family residence, and which is approved for 
mortgage insurance prior to the beginning of construction : Provided, That if the mortgagor 
is not the occupant of the property at the time of insurance, the principal obligation of the 
mortgage shall not exceed 85 per centum of the appraised value of the property : Provided 
further, That the Commissioner finds that the property with respect to which the mortgage 
is executed is an acceptable risk, giving consideration to the need for providing adequate 
housing for families of low and moderate income particularly in suburban and outlying 
areas or small communities : Provided further. That under the foregoing provisions of this 
subsection the Commissioner is authorized to insure any mortgage issued with respect to 
the construction of a farm home on a plot of land five or more acres in size adjacent to 
a public highwa.v. the total amount of Insurance outstanding at any one time under this 
proviso not to exceed $100,000,000" 



189 



§203 NATIONAL HOUSING ACT 

(b) of this section ^ and not in excess of 97 per centum (or, in any 
case where the dwelling is not approved for mortgage insurance 
prior to the beginning of construction, unless the construction of the 
dwelling was completed more than one year prior to the application 
for mortgage insurance or the dwelling was approved for guaranty, 
insurance, or direct loan under chapter 37 of title 38, United States 
Code, prior to the beginning of construction, 90 per centum) of the 
appraised value of a property located in an area where the Secretary 
finds it is not practicable to obtain conformity with many of the 
requirements essential to the insurance of mortgages on housing in 
built-up urban areas, upon which there is located a dwelling de- 
signed principally for a single-family residence: Provided^ That if 
the mortgagor is not the occupant of the property at the time of in- 
surance, the principal obligation of the mortgage shall not exceed 85 
per centum of the appraised value of the property : Provided further^ 
That the Secretary finds that the property with respect to which 
the mortgage is executed is an acceptable risk, giving consideration to 
the need for providing adequate housing for families of low and moder- 
ate income particularly in suburban and outlying areas or small com- 
munities : Provided further^ That under the foregoing provisions of 
this subsection the Secretary is authorized to insure any mortgage 
issued with respect to a farm home on a plot of land five or more acres 
in size ad j acent to a public highway. 

( j ) 2 Loans secured by mortgages insured under this section shall 
not be taken into account in determining the amount of real estate 
loans which a national bank may make in relation to its capital and 
surplus or its time and savings deposits. 

(k) (1) ^ The Secretary may, in order to assist in the rehabilitation 
of one- to four-family structures used primarily for residential pur- 
poses, insure and make commitments to insure rehabilitation loans 
(including advances made during rehabilitation) made by financial 
institutions on and after 180 days following the date of the enactment 
of the Housing and Community Development Amendments of 1978. 
Such commitments to insure and such insurance shall be made upon 
such terms and conditions which the Secretary may prescribe and 
which are consistent with the provisions of subsections (b), (c), (e). 
(i) and (j) of this section, except as modified by the provisions of this 
subsection. 

(2) For the purpose of this subsection — 

(A) the term "rehabilitation loan" means a loan, advance of 
credit, or purchase of an obligation representing a loan or advance 
of credit, made for the purpose of financing — 

(i) the rehabilitation of an existing one- to four-unit 

x^f^r 113(aU3). Housing and Urban Development Act of 1960, Public Law 91-152, 
nnnrnvpd December 24, 1969, 83 Stat. 379, 383, substituted "$16,200" for "$13,500" ; Hous- 
ing and Community Development Act of 1977, Public Law 95-128, approved October 12, 
1977 deleted "$16,200" and inserted "75 per centum of the limit on the principal obliga- 
finn annlicable to a one-family residence under subsection (b) of this section." 

2 AViaed by sec. 809. Housing Act of 1959, Public Law 86-372, approved September 23, 
1959. 73 Stat. 054. 688. 

"• Housing and Community Development Amendments of 1978. sec. 101(c) (1). Public Law 
95-557, 92 Stat. 2080 (1978), amending Housing Act of 1961, sec. 102(b), Public Law 
87-70. 75 Stat. 149 (1961). 



190 



NATIONAL HOUSING ACT §208 

structure which will be used primarily for residential pur- 
^ poses; 

(ii) the rehabilitation of such a structure and the refinanc- 
ing of the outstanding indebtedness on such structure and the 
real property on Avhich the structure is located; or 

(iii) the rehabilitation of such a structure and the pur- 
chase of the structure and the real property on which it is 
located ; and 
(B) the term "rehabilitation" means the improvement (includ- 
ing improvements designed to meet cost-effective energy conser- 
vation standards prescribed by the Secretary) or repair of a 
structure, or facilities in connection with a structure, and may 
include the provision of such sanitary or other facilities as are 
required by applicable codes, a community development plan, or a 
statewide property insurance plan to be provided by the owner or 
tenant of the project. 
(8) To be eligible for insurance under this subsection, a rehabilita- 
tion loan shall — 

(A) involve a principal obligation (including such initial serv- 
ice charges, appraisal, inspection, and other fees as the Secretary 
shall approve) in an amount which does not exceed, when added 
to any outstanding indebtedness of the borrower which is secured 
by the structure and the property on which it is located, the 
amount specified in subsection (b)(2); except that, in determining 
the amount of the principal obligation for purposes of this sub- 
section, the Secretary shall establish as the appraised value of the 
property an amount not to exceed the sum of the estimated cost of 
rehabilitation and the Secretary's estimate of the v^alue of the 
property before rehabilitation ; 

(B) bear interest at a rate permitted by the Secretary for mort- 
gages insured under this section ; except that the Secretary may 
permit a higher rate of interest to be applied to the loan with re- 
spect to the period beginning with the making of the loan and 
ending with the completion of the rehabilitation or such earlier 
time as the Secretary may determine; 

(C) be an acceptable risk, as determined by the Secretary; and 

(D) comply with such other terms, conditions, and restrictions 
as the Secretary may prescribe. 

(4) Any rehabilitation loan insured under this subsection may be 
refinanced and extended in accordance with such terms and conditions 
as the Secretary may prescribe, but in no event for an additional 
amount or term which exceeds the maximum provided for in this sub- 
section. 

(6) All funds received and all disbursements made pursuant to the 
authority established by this subsection shall be credited or charged, 
as appropriate, to the General Insurance Fund, and insurance benefits 
shall be paid in cash out of such Fund or in debentures executed in the 
name of such Fund. Insurance benefits paid with respect to loans 
insured under this subsection shall be paid in accordance with para- 
graphs (6) and (7) of section •220(h), except that any reference to 
"this subsection" in such paragraphs shall be construed as referring to 
this subsection. 



191 



§ 203 NATIONAL HOUSING ACT 

(1) Repealed.^ 

(m)2 The Secretary is authorized to insure under this section any 
mortgage meeting the requirements of subsection (b) of this section, 
except as modified by this subsection. To be eligible, the mortgage 
shall involve a principal obligation not in excess of $18,000 and not 
in excess of 75 per centum of the appraised value of the property, as 
of the date the mortgage is accepted for insurance. The mortgage shall 
cover a dwelling for single-family occupancy which is approved for 
mortgage insurance prior to the beginning of construction. The dwell- 
ing need not be designed for year-round occupancy, but it shall (1) 
meet standards prescribed by the Secretary, and (2) be located in an 
area where the Secretary finds it is not practicable to obtain conform- 
ity with many of the requirements essential to the insuring of mort- 
gages on housing in built-up urban areas. The development of the 
property with respect to which the mortgage is executed shall be 
consistent with the conservation of water and other natural resources 
of the area, and such property shall be an acceptable risk, giving con- 
sideration to the economic potential of the area in which the dwelling 
is located and the contribution that the housing will make toward 
improving the area. The Secretary may suspend the issuance of com- 
mitments under this subsection for the insurance of mortgages secured 
by properties situated in any area, whenever he determines that (i) 
there is a serious and unusual shortage of mortgage funds for resi- 
dential construction in such area, (ii) such insurance would affect 
materially and adversely the availability of mortgage funds for resi- 
dential construction in such area, and (iii) such suspension would not 
have an adverse impact upon the balanced economic development of 
the area. 

(n) (1) The Secretary is authorized to insure under this section 
any mortgage meetmg the requirements of subsection (b) of this 
section, except as modified by this subsection. To be eligible, the mort- 
gage shall involve a dwelling unit in a cooperative housing project 
which is covered by a blanket mortgage insured under this Act. The 
mortgage amount as determined under the other provisions of sub- 
section (b) of this section shall be reduced by an amount equal to 
the portion of the unpaid balance of the blanket mortgage covering 
the project which is attributable (as of the date the mortgage is 
accepted for insurance) to such unit. ^ 

( 2 ) For the purpose of this subsection — 

1 Sec. 203(1), which authorized insurance of mortgages in riot-affected areas, was re- 
pealed by sec. 103, Housing and Urban Development Act of 1968, Public L,aw 80-448, 
approved Au£;ust 1. 1968, 82 Stat. 476, 486. But see sec. 223, which permits relaxation 
of insurance requirements in older, declining areas. 

2 Sec. 203 (m) was inserted by sec. 318, Housing and Urban Development Act of 1968, 
Public Law 90-448, approved August 1, 1968, 82 Stat. 476. 512, except that sec. 113(a) v4), 
Housing and Urban Developemnt Act of 1969. Public Law 91-152, approved December 24, 
1969, 83 Stat. 379. 383. substituted "$18,000" for "$15,000''. 



192 



NATIONAL HQUSING ACT §203 

(A) The terms "home mortgage" and "mortgage" include a first 
lien given (m accordance with the laws of the State where the 
property is located and accompanied by such security and other 
undertakings as may be required under regulations of the Secre- 
tary) to secure a loan made to finance the purchase of stock or 
membership in nonprofit cooperative ownership housing cor- 
poration the permanent occupancy of the dwelling units of "which 
is restricted to members of such corporation, where the purchase 
of such stock or membership will entitle the purchaser to the per- 
manent occupancy of one of such units. 

(B) The terms "appraised value of the property", "value of 
the property", and "value" include the appraised value of a dwell- 
ing unit in a cooperative housing project of the type described in 
subparagraph (A) where the purchase of the stock or member- 
ship involved will entitle the purchaser to the permanent occu- 
pancy of that unit ; and the term "property" includes a dwelling 
unit in such a cooperative project. 

(C) The term "mortgagor" includes a person or persons giving 
a first lien (of the type described in subparagraph ( A) ) to secure 
a loan to finance the purchase of stock or membership in a co- 
operative housing corporation.^ 

(o) (1) Notwithstanding any other provision of this section or any 
other section of this title, the Secretary is authorized to insure, and to 
commit to insure, under subsection (b) of this section as modified by 
this subsection a mortgage which meets both the requirements of this 
subsection and such criteria as the Secretary by regulation may pre- 
scribe to further the purpose of this subsection, in any community 
where the Secretary determines that — 

(A) temporary adverse economic conditions exist throughout 
the community as a direct and primary result of outstanding 
claims to ownership of land in the community by an American 

• Indian tribe, band, or Nation ; 

(B) such ownership claims are reasonably likely to be settled, 
by court action or otherwise ; 

(•C) as a direct result of the community's temporarily impaired 
economic condition, owner occupants of homes in the community 
have been involuntarily unemployed or underemployed and have 
thus incurred substantial reductions in income which significantly 
impair their ability to continue timely payment of their 
mortgages ; 

(D) as a result, widespread mortgage foreclosures and dis- 
tress sales of homes are likely in the community ; and 

(E) fifty or more individual homeowners were joined as parties 
defendant or were members of a defendant class prior to December 
31, 1976, in litigation involving claims to ownership of land in the 
community by an American Indian tribe, band, or Nation. 

(2) A mortgage shall be eligible for insurance under subsection (b) 
of this section as modified by this subsection without regard to limita- 
tions in this title relating to a mortgagor's reasonable ability to pay, 
economic soundness, marketabilitv of title, or any other statutory 
restriction which the Secretarv determines is contrary to the purpose 
of this subsection, but only if the mortgagor is an owner occupant of a 

1 Sec. 4(b) of Emergency Home Purchase Assistance Act of 1974, Public Law 93-449, S8 
Stat. 1364, approved October 18, 1974. added this new section (n). 

193 



§ 204 NATIONAL HOUSING ACT 

home in a community specified in paragraph (1) who, as a direct result 
of the community's temporarily impaired economic condition, has been 
involuntarily unemplo3^ed or underemployed and has thus incurred a 
substantial reduction in income which significantly impairs the owner's 
ability to continue timely payment of the mortgage. The Secretaiy is 
authorized to encourage or afford directly to or on behalf of mort- 
gagors whose mortgages are insured under subsection (b) as modified 
by this subsection forebearance, assignment of mortgages to the Secre- 
tary, or such other relief as the Secretary deems appropriate and 
consistent with the purpose of this subsection. The Secretary, in 
connection with any mortgage insured under subsection (b) as modi- 
fied by this subsection, shall have all statutory powers, authority, and 
responsibilities which the Secretary has with respect to other mort- 
gages insured under subsection (b), except that the Secretary may 
modify such powers, authority, or responsibilities where the Secre- 
tary deems such action to be necessary because of the special nature of 
the mortgage involved. Notwithstanding section 202 of this title, the 
insurance of a mortgage under subsection (b) of this section as modi- 
fied by this subsection shall be the obligation of the Special Risk 
Insurance Fund created pursuant to section 238 of this title.^ 

PAYMENT OF INSURANCE 

Sec. 204.2 (a) In any case which the mortgagee under a mort- 
gage insured under section 203 shall have foreclosed and taken pos- 
session of the mortgaged property in accordance with regulations of, 
and within a period to be determined by, the Secretary, or shall, 
with the consent of the Secretary, have otherwise acquired such 
property from the mortgagor after default, the mortgagee shall be 
entitled to receive the benefit of the insurance as hereinafter provided, 
upon (1) the prompt conveyance to the Secretary of title to the 
property which meets the requirements of rules and regulations of the 
Secretary in force at the time the mortgage was insured, and which 
is evidenced in the manner prescribed by such rules and regulations, 
and (2) the assignment to him of all claims of the mortgagee against 
the mortgagor or others, arising out of the mortgage transaction or 
foreclosure proceedings, except such claims as may have been released 
with the consent of the Secretary. Upon such conveyance and 
assignm.ent the obligation of the mortgagee to pay the premium 
charges for insurance shall cease and the Secretary shall, subject 
to the cash adjustment hereinafter provided, issue to the mortgagee 
debentures having a total face value equal to the value of the mortgage 
and (subject to subsection (e) (2) ) a certificate of claim, as hereinafter 
provided. For the purposes of this subsection, the value of the mort- 
gage shall be determined, in accordance with rules and regulations 
prescribed by the Secretary, by adding to the amount of the orig- 
inal principal obligation of the mortgage which was unpaid on the date 
of the institution of foreclosure proceedings, or on the date of the 
acquisition of the property after default other than by foreclosure, the 
amount of all payments which have been made by the mortgagee for 

1 Housing and Community Development Act of 1977, Public I^w 95-128, approved 
October 12. 1977, inserted Sees. 204 (o) (1) and (2). 

= Secs. 104(a) and 105(a). Housing Act of 1964. Public Law 88-560, approved Septem- 
bPF 2. 1964. 78 Stat. 769. 770. 771. 772. made chances in the provisions of this section for 
the payment of insurance benefits. The changes are designed to simplify payment procedures. 

194 



NATIONAL HOUSING ACT §204 

taxes, ground rents, and water rates, which are liens prior to the 
mortgage, special assessments which are noted on the application for 
insurance or which become liens after the insurance of the mortgage, 
charges for the administration, operation, maintenance and repair of 
community-owned property or the maintenance and repair of the 
mortgaged property, the obligation for which arises out of a covenant 
filed for record and approved by the Secretary prior to the insur- 
ance of the mortgage, insurance on the mortgaged property, and any 
mortgage insurance premiums, and any tax imposed by the United 
States ^ upon any deed or other instrument by which said property 
was acquired by the mortgagee and transferred or conveyed to the 
Secretary, and by deducting from such total amount any amount 
received on account of the mortgage after either of such dates, and any 
amount received as rent or other income from the property, less 
reasonable expenses incurred in handling the property, after either 
of such dates: Provided^ That with respect to mortgages which are 
accepted for insurance under section 203(b) (2) (B) of this Act, and 
which are foreclosed before there shall have been paid on account of 
the principal obligation of the mortgage a sum equal to 10 per centum 
of the appraised value of the property as of the date the mortgage 
was accepted for insurance, there may be included in the debentures 
issued by the Secretary, on account of foreclosure costs actually 
paid by the mortgagee and approved by the Secretary an amount 
not in excess of 2 per centum of the unpaid principal of the mortgage 
as of the date of the institution of foreclosure proceedings, but in no 
event in excess of $75 : And provided further. That with respect to 
mortgages which are accepted for insurance under section 203(b) (2) 
(D) or under the second ^ proviso of section 207(c) (2) of this Act, 
or under section 213 of this Act, or with respect to any mortgage 
accepted for insurance under section 203 on or after effective date ^ 
of the Housing Act of 1954, there may be included in the debentures 
issued by the Secretary on account of the cost of foreclosure (or 
of acquiring the property by other means) actually paid by the mort- 
gagee and approved by the Secretary an amount, not in excess of 
two-thirds of such cost or $75 whichever is the greater : And provided 
further^ That with respect to a mortgage accepted for insurance pur- 
suant to a commitment issued on or after the date of enactment of the 
Housing; Act of 1964/ the Secretary may include in debentures or 
in the cash payment an amount not to exceed the foreclosure, acquisi- 
tion, and conveyance costs actually paid by the mortgagee and ap- 
proved by the Secretary : And provided further^ That with respect 
to a mortgage accepted for insurance pursuant to a commitment issued 
prior to date of enactment of the Housing Act of 1964 * the Sec- 
retary may, with the consent of the mortfi:agee (in lieu of issuing a 
certificate of claim as provided in subsection (e) ) , include in deben- 
tures or in the cash payment, in addition to amounts otherwise allowed 
for such costs, an amount not to exceed one-third of the total foreclo- 

1 Provision for addition of Federal tax added by sec. 111(1) of the Housing Act of 1954, 
Public Law 560, 83d Congress, approved August 2, 1954. 68 Stat. 590, 593. 

a This proviso has been deleted from sec. 207(c)(2) and reference thereto is erroneous. 

3 Provision with resnect to mortgages acepted for Insurance after the effective date of 
the Housing Act of 1954 added bv sec. Ill (2) of the Housing Act of 1954. Public Law 560, 
83d Congress, approved August 2, 1954, 68 Stat. 590, 593. Effective date of Housing Act 
of 1954. August 2, 1954. 

* September 2, 1964. 



195 



§204 NATIONAL HOUSING ACT 

sure, acquisition, and conveyance costs actually paid by the mortgagee 
and approved by the Secretary, but in no event may the total al- 
lowance for such costs exceed the amount actually paid by the mort- 
gagee : And provided further^ That with respect to mortgages to which 
the provisions of sections 302 and 306 of the Soldiers' and Sailors' Civil 
Relief Act of 1940, as now or hereafter amended, apply and which are 
insured under section 203 of the National Housing Act, as now or 
hereafter amended, and subject to such regulations and conditions as 
the Secretary may prescribe, there shall be included in the de- 
bentures an amount which the Secretary finds to be sufficient to 
compensate the mortgagee for any loss which it may have sustained on 
account of interest on debentures by reason of its having postponed 
the institution of foreclosure proceedings or the acquisition of the 
property by other means during any part or all of the period of such 
military service and three months thereafter : And provided further, 
That where the claim is paid in cash there shall be included in the 
cash payment an amount equivalent to the compensation for loss of 
debenture interest that would be included in computing debentures if 
such claim were being paid in debentures : And provided further^ That 
with respect to any mortgage covering a one-, two-, three-, or four- 
family residence insured under this Act, if the Secretary finds, 
after notice of default, that the default was due to circumstances be- 
yond the control of the mortgagor, he may, upon such terms and condi- 
tions as he may prescribe, (1) approve the request of the mortgagee for 
an extension of the time for the curing of the default and of the time 
for commencing foreclosure proceedings or for otherwise acquiring 
title to the mortgaged property to such time as the Secretary may 
determine is necessary and desirable to enable the mortgagor to com- 
plete the mortgage payments, including an extension of time beyond 
the stated maturity of the mortgage, and in the event of a subsequent 
foreclosure or acquisition of the property by other means the Sec- 
retary is authorized to include in the debentures an amount equal to 
any unpaid mortgage interest, or (2) approve a modification of the 
terms of the mortgage for the purpose of changing the amortization 
provisions by recasting, over the remaining term of the mortgage or 
over such longer period as may be approved by the Secretary, the 
total unpaid amount then due, as determined by the Secretary, 
with the modification to become effective currently or to become effec- 
tive upon the termination of an agreed-upon extension of the period 
for curing the default ; and the principal amount of the mortgage, as 
modified, shall be considered to be the "original principal obligation 
of the mortgage" as that term is used in this Act for the purpose of 
computing the total face value of the debentures to be issued or the 
cash payment to be made by the Secretary to a mortgagee: And 
provided further^^ That, notwithstanding any requirement contained 
in this Act that debentures may be issued only upon acquisition of title 
and possession by the mortgagee and its subsequent conveyance and -: 
transfer to the Secretary, and for the purpose of avoiding unneces- 
sary conveyance expense in connection with payment of insurance 
benefits under the provisions of this Act, the Secretary is author- 



iThis proviso added by sec. 111(3) of the Housing Act of 1954, Public Law 560. 83d 
Congress, approved August 2, 1954, 68 Stat. 590. 593. 



196 



NATIONAL HOUSING ACT §204 

ized, subject to such rules and regulations as he may prescribe, to per- 
mit the mortgagee to tender to the Secretary a satisfactory con- 
veyance of title and transfer of possession direct from the mortgagor 
or other appropriate grantor and to pay the insurance benefits to the 
mortgagee which it would otherwise be entitled to if such conveyance 
had been made to the mortgagee and from the mortgagee to the 
Secretary. 

(b) The Secretary may at any time, under such terms and conditions 
as he may prescribe, consent to the release of the mortgagor from his 
liability under the mortgage or the credit instrument secured thereby, 
or consent to the release of parts of the mortgaged property from the 
lien of the mortgage. 

(c) Debentures issued under this section shall be in such form and 
denominations in multiples of $50, shall be subject to such terms and 
conditions, and shall include such provisions for redemption, if any, 
as may be prescribed by the Secretary with the approval of the 
Secretary of the Treasury, and may be in coupon or registered form. 
Any difference between the value of the mortgage determined as herein 
provided and the aggregate face value of the debentures issued, not 
to exceed S350, shall be adjusted by the payment of cash by the Sec- 
retary to the mortgagee from the Mutual Mortgage Insurance Fund. 

(d) The debentures issued under this section to any mortgagee with 
respect to mortgages insured under section 203 shall be executed in the 
name of the Mutual Mortgage Insurance Fund as obligor, shall be 
signed by the Secretary by either his written or engraved signature, 
and shall be negotiable. All such debentures shall be dated as of the 
date foreclosure proceedings were instituted, or the property was 
otherwise acquired by the mortgagee after default: Provided^ That 
debentures issued pui'suant to claims for insurance filed on or after the 
date of enactment of the Housing Act of 1964 ^ shall be dated as of 
the date of default or as of such later date as the Secretary, in his dis- 
cretion, may establish by regulation. The debentures shall bear interest 
from such date at a rate ^ established by the Secretary pursuant to sec- 
tion 224, payable semiannually on the 1st day of January and the 1st 
day of Jnlv of each year, and shall mature twenty years ^ after the date 
thereof. Such debentures as are issued in exchange for property cov- 
ered by mortgages insured under section 203 or section 207 prior to the 
date of enactment of the National Housing Act Amendments of 1938 
shall be subject only to such Federal, State, and local taxes as the mort- 
gages in exchange for which they are issued would be subject to in the 
hands of the holder of the debentures and shall be a liability of the 

1 Sontember 2, 19C4. 

2 Srr. 108(a). Housinp: Act of 1957. Public Law 85-104. approved July 12. 1957. 71 Stat. 
294. 207. substituted "established by the rommissioner pursuant to ser-tion 224." for 
"determined by the Commissionpr. with the approval of the Senretary of the Tre.isury. at 
the time the mortgajre was offered for insurance, but not to exceed 3 per centum per annum". 

3 Sec. 112(a) of the Housinp Act of 1954, Public Law 560. 8.3d Conjrreps, approved 
Aujrnst 2. 1954. 68 Stat. 590. 593, amended sec. 204(d) to provide (as set forth in the 
text) that all thesf^ debentures shall have 20-year maturities. Sec. 112(e) of the Hous- 
ing Act of 1954 provided, however, that the chance in maturity provisions "shall not 
apply in any case where the mortscajre involved was insured or the commitment for such 
insurance wns issued prior to the effective date of the Housing Act of 1954." Prior to 
amendment by the ]9'54 act sec. 204(d) provided that these debentures matured 3 years 
after the 1st day of July following the maturity date of the mortgage in exchange for 
which the debentures were issued, except that debentures Issued with respect to sec. 213 
mortgages matured 20 years after the date of the debentures. 



197 



§204 NATIONAL HOUSING ACT 

Mutual Mortgage Insurance Fund, but such debentures shall be fully 
and unconditionally guaranteed as to principal and interest by the 
United States; but any mortgagee entitled to receive any such deben- 
tures may elect to receive in lieu thereof a cash adjustment and deben- 
tures issued as hereinafter provided and bearing the current rate of 
interest. Such debentures as are issued in exchange for property cov- 
ered by mortgages insured after the date of enactment of the National 
Housing Act Amendments of 1938 shall be exempt, both as to principal 
and interest, from all taxation (except surtax, estate, inheritance, and 
gift taxes) now or hereafter imposed by the United States,^ by any 
Territory, dependency, or possession thereof, or by any State, county, 
municipality, or local taxing authority ; and such debentures shall be 
paid out of the Mutual Mortgage Insurance Fund, which shall be pri- 
marily liable therefor, and they shall be fully and unconditionally 
guaranteed as to principal and interest by the United States, and such 
guaranty shall be expressed on the face of the debentures. In the 
event that the Mutual Mortgage Insurance Fund fails to pay upon 
demand, when due, the principal of or interest on any debentures is- 
sued under this section, the Secretary of the Treasury shall pay to the 
holders the amount thereof which is hereby authorized to be appro- 
priated, out of any money in the Treasury not otherwise appropriated, 
and thereupon to the extent of the amount so paid the Secretary of the 
Treasury shall succeed to all the rights of the holders of such 
debentures. 

(e) (1) Subject to paragraph (2), the certificate of claim issued by 
the Secretary to any mortgagee shall be for an amount which the 
Secretary determines to be sufficient, when added to the face value 
of the debentures issued and the cash adjustment paid to the mort- 
gagee, to equal the amount which the mortgagee would have received if, 
at the time of the conveyance to the Secretary of the property covered 
by the mortgage, the mortgagor had redeemed the property and paid 
in full all obligations under the mortgage and a reasonable amount 
for necessary expenses incurred by the mortgagee in connection with 
the foreclosure proceedings, or the acquisition of the mortgaged 
property otherwise, and the conveyance thereof to the Secretary. 
Each such certificate of claim shall provide that there shall accrue 
to the holder of such certificate with respect to the face amount of such 
certificate an increment at the rate of 3 per centum per annum which 
shall not be compounded. The amount to which the holder of any such 
certificate shall be entitled shall be determined as provided in sub- 
section (f). 

(2) A certificate of claim shall not be issued and the provisions of 
paragraph (1) of this subsection shall not be applicable in the case of 
a mortgage accepted for insurance pursuant to a commitment issued 
on or after the date of enactment of the Housing Act of 1964.- 

(f)(1) If, after deducting (in such manner and amount as the 
Secretary shall determine to be equitable and in accordance with 
sound accounting practice) the expenses incurred by the Secretary, 
the net amount realized from any property conveyed to the Secretary 

1 Dpbentnres issued in connpction with contracts entered into pursuant to commitments 
issued on or after March 1. 1941, do not carry such Federal tax exemption. See sec. 4. 
Public Debt Act of 1941, as amended. 31 U.S.C. 742a. 

2 September 2. 1964. 



198 



NATIONAL HOUSING ACT §204 

under this section and the claims assigned therewith exceed the face 
vahie of the debentures issued and the cash paid in exchange for such 
property phis all interest paid on such debentures, such excess shall 
be divided as follows : 

(i) If such excess is greater than the total amount payable under 
the certificate of claim issued in connection with such property, the 
Secretary shall pay to the holder of such certificate the full amount 
so payable, and any excess remaining thereafter shall be paid to the 
mortgagor of such property if the mortgage was insured under sec- 
tion 203: Provided^ That on and after the date of enactment of the 
Housing Act of 1964, any excess remaining after payment to the 
holder of the full amount of the certificate of claim, together with 
the accrued interest increment thereon, shall be retained by the 
Secretary and credited to the applicable insurance fund; and 

(ii) If such excess is equal to or less than the total amount payable 
under such certificate of claim, the Secretary shall pay to the holder 
of such certificate the full amount of such excess. 

(2) ^ Notwithstanding any other provisions of this section, the Sec- 
retary is authorized with respect to m.ortgages insured pursuant to 
commitments for insurance issued after the date of enactment of the 
Housing Amendments of 1955,^ and, with the consent of the mort- 
gagee or mortgagor, as the case may be, with respect to mortgages in- 
sured pursuant to commitments issued prior to such date, to effect 
the settlement of certificates of claim and refunds to mortgagors 
at any time after the sale or transfer of title to the property con- 
veyed to the Secretary under this section and without awaiting the 
final liquidation of such property for the purpose of determining 
the net amount to be realized therefrom : Provided^ That the settle- 
ment authority created by the Housing Amendments of 1955 shall 
be terminated with respect to any certificates of claim outstanding 
as of the date of enactment of the Housing Act of 1964.^ 

(8) With the consent of the holder thereof, the Secretary is author- 
ized, without awaiting the final liquidation of the Secretary's interest 
in the property, to settle any certificate of claim issued pursuant to 
subsection (e), with respect to which settlement had not been effected 
prior to the date of enactment of the Housing Act of 1964, by making 
payment in cash to the holder thereof of such amount not exceeding 
the face amount of the certificate of claim, together with the accrued 
interest tliereon, as tlie Secretary may consider appropriate : Provided^ 
That in any case where the certificate of claim is settled in accordance 
with the provisions of this paragraph, any amounts realized after the 
date of enactment of the Housing Act of 1964, in the liquidation of 
the Secretary's interest in the property, shall be retained by the Secre- 
tary and credited to the applicable insurance fund. 

(g) Notwithstanding any other provision of law relating to the 
acquisition, handling, or disposal of real property by the United States, 
the Secretary shall have power to deal with, complete, rent, reno- 
vate, modernize, insure, or sell for cash or credit, in his discretion, 
any properties conveyed to him in exchange for debentures and cer- 
tificates of claim as provided in this section ; and notwithstanding any 



^This narafrraph added by sec. 102 Ca) of the Honsjng: Amendments of 1955, Public Law 
345, 84th ConpresR, approved August 11, 1955, 69 Stat. 635. 
2 Aufnist 11, 1955. 
' September 2, 1964. 



199 



§204 NATIONAL HOUSING ACT 

other provision of law, the Secretary shall also have power to pur- 
sue to final collection, by way of compromise or otherwise, all claims 
against mortgagors assigned by mortgagees to the Secretary as 
provided in tliis section : Provided^ That section 3709 of the Revised 
Statutes shall not be construed to apply to any contract for hazard 
insurance, or to any purchase or contract for services or supplies on 
account of such property if the amount thereof does not exceed $1,000. 
The power to convey and to execute in the name of the Secretary 
deeds of conveyance, deeds of release, assignments and satisfactions of 
mortgages, and any other written instrument relating to real or ^ per- 
sonal property or any interest therein heretofore or hereafter acquired 
by the Secretary pursuant to the provisions of this Act, may be exer- 
cised by an officer appointed by him, without the execution of any ex- 
press delegation of power or power of attorney : Provided^ That noth- 
ing in this subsection shall be construed to prevent the Secretary from 
delegating such power by order or by power of attorney, in his discre- 
tion, to any officer, agent, or employee he may appoint : ^ And provided 
further^ That a conveyance or transfer of title to real or personal prop- 
erty or an interest therein to the Secretary of Housing and Urban De- 
velopment, his successors and assigns, without identifying the Secre- 
tary therein, shall be deemed a proper conveyance or transfer to the 
same extent and of like effect as if the Secretary were personally 
named in such conveyance or transfer. 

(h) No mortgagee or mortgagor shall have, and no certificate of 
claim shall be construed to give to any mortgagee or mortgagor, any 
right or interest in any property conveyed to the Secretary or in any 
claim assigned to him; nor shall the Secretary owe any duty to any 
mortgagee or mortgagor with respect to the handling or disposal of 
any such property or the collection of any such claim. 

(j) 2 In the event that any mortgage under a mortgage insured 
under section 203 forecloses on the mortgaged property but does not 
convey such property to the Secretary in accordance with this section, 
and the Secretary is given written notice thereof, or in the event that 
the mortgagor pays the obligation under the mortgage in full prior to 
the maturity thereof, and the mortgagee pays any adjusted premium 
charge required under the provisions of section 203 (c), and the Secre- 
tary is given written notice by the mortgagee of the payment of such 
obligation, the obligation to pay any subsequent premium charge for 
insurance shall cease, and all rights of the mortofagee and the mortgagor 
imder this section shall terminate as of the date of such notice. 

(k) ^ Notwithstanding any other provision of this section or of sec- 
tion 604 or 904 and with respect to any debentures issued in exchancre 
for properties conveyed to and accepted by the Secretars^ after the 



iSec. f)12(c). Housinir Act of 1961, Public Law 87-70, approved June 30. 1961, 75 Stat. 
149, 380. inserted "or personal", and also inserted the last proviso in subsection (ff). 

2 A'fldpd bv sec. ll."5. TTnusInG: Act of 19-''>4. Public Law ofiO. 8.3d Congress, approved 
Autrust 2. 1954, 68 Stat. 590. 594. No snbsec. 204 (i> has been enacted. 

3 Tniincdiatelv prior to amendment bv sec. 117. Housinjr Act of 1959. Publi'' Law 86-372, 
approved September 23, 1959. 73 Stat. 654. 664. subsection (k) read as follows: 

"(k) Notwitbstandin^ any other provision of this section or of section 604 or 904, with 
respect to any debentures issued pursuant to this section or section 604 or 904. the Commis- 
sioner may (1) include in such debentures reasonable payments m.ade by the mortcrajree, 
with the approval of the Commissioner, for the purpose of protecting, operating, or pre- 
serving the property, and taxes imposed upon any deed or other instrument by which the 
property was acquired by the mortgagee and transferred or conveyed to the Commissioner, 
and (2) terminate the mortgagee's obligation to pay mortgage insurance premiums upon 
receipt of an application for debentures filed by the mortgagee." 



200 



NATIONAL HOUSING ACT §205 

effective date of the Housing Act of 1959 ^ in accordance with such 
sections, the Secretary may (1) include in debentures reasonable pay- 
ments made by the mortgagee with the approval of the Secretary for 
the purpose of protecting, operating, or preserving the property*^ and 
taxes imposed upon any deed or any other instrument by which the 
property was acquired by the mortgagee and transferred or conveyed 
to the Secretary; (2) include in debentures as a portion of foreclosure 
costs (to the extent that foreclosure costs may be included in such 
debentures by any other provision of this Act) payments made bv the 
mortgagee for tlie cost of acquiring the property \and conveying and 
evidencing title to the property to the Secretary; and (3) terminate 
the mortgagee's obligation to pay mortgage insurance premiums upon 
i-eceipt of an application for debenture^ filed by the mortgagee, or in 
the event the contract of insurance is terminated pursuant to section 



CLASSIFICATIOX OF MORTGAGES AND IXSURAXCE FUND 



Sec. 205.2 (a) The Secretary shall establish as of July 1, 1954, 
in the Mutual Mortgage Insurance Fund a General Surplus Account 
and a Participating Reserve Account. All of the assets of the Gen- 
eral ReinsuT-ance Account shall be transferred to the General Sur])lus 
Account whereuf)on the General Reinsurance xVccount shall be abol- 
ished. There shall be transferred from the various group accounts 
to the Participating Reserve Account as of July 1, 1954, an amount 
equal to the aggregate amount which would have been distributed 
under the provisions of section 205 in effect on June 30, 1954, if all 
outstanding mortgages in such group accounts had been paid in full on 
said date. All of the remaining balances of said group accounts shall as 
of said date be transferred to the General Surplus Account whereupon 
all of said group accounts shall be abolished. 

(b) The aggregate net income thereafter received or any net loss 
thereafter sustained by the ]Mutual Mortgage Insurance Fund in any 
semiannual period shall be credited or charged to the General Surplus 
Account and/or the Participating Reserve Account in such manner 
and amounts as the Secretary may determine to be in accord with 
sound actuarial and accounting practice. 

(c) Upon termination of the insurance obligation of the Mutual 
^loT'tgage Insurance Fund by payment of any mortgage insured there- 
under, the Secretary is authorized to distribute to the mortgagor a 
share of the Participating Reserve Account in such manner and amount 
as the Secretary shall determine to be equitable and in accordance 
with sound actuarial and accounting practice: Provided^ That, in 
no event, shall any such distributable share exceed the aggregate sched- 
uled annual premiums of the mortgagor to the year of termination of 
the insurance. 

(d) No mortgagor or mortgagee of any mortgage insured under 
section 203 shall have any vested right in a credit balance in any sucli 
account or be subject to any liability arising out of the mutuality of 
the Fund and the determination of the Secretary as to the amount 
to be paid by him to any mortgagor shall be final and conclusive. 

^ September 23. 1959. 

2 As nmended bv sec. 114. Hon.sing Act of 1954, Public Law 5G0, 83d Congress, approved 
August 2, 1954, G8 Stat. 590. 594. 



201 

U5-7014 - 79 - lU 



206 NATIONAL HOUSING ACT 



INVESTMENT OF FUNDS 



Sec. 206. Moneys in the Fund not needed for the current operations 
of the Department of Housing and Urban Development related to 
insurance under section 203 shall be deposited with the Treasurer of 
the United States to the credit of the Fund, or invested in bonds or 
other obligations of, or in bonds or other obligations guaranteed as to 
principal and interest by, the United States or ^ any agency of the 
United States : Provided^ That such monej^s shall to the maximum 
extent feasible be invested in such bonds or other obligations the pro- 
ceeds of which will be used to directly support the residential mort- 
gage market. The Secretary may, with the approval of the Secretary 
of the Treasury, purchase in the open market debentures issued under 
the provisions of section 204. Such purchases shall be made at a price 
which will provide an investment yield of not less than the yield 
obtainable from other investments authorized by this section. Deben- 
tures so purchased shall be canceled and not reissued, and the several 
group accounts to which such debentures have been charged shall be 
charged with the amounts used in making such purchases. 

RENTAL HOUSING INSURANCE 

Sec. 207. (a) As used in this section — 

(1) The term "mortgage" means a first mortgage on real estate in 
fee simple, or on the interest of either the lessor or lessee thereof (A) 
under a lease for not less than ninety-nine years which is renewable 
or (B) under a lease having a period of not less than fifty years to 
run from the date the mortgage was executed, upon which there is 
located or upon which there is to be constructed a building or buildings 
designed principally for residential use or upon which there is located 
or to be constructed facilities for mobile homes ; - and the term "first 
mortgage" means such classes of first liens as are commonly given to 
secure advances (including but not being limited to advances during 
construction) on, or the unpaid purchase price of, real estate under the 
law^s of the State in which the real estate is located, together with the 
credit instrument or instruments, if any, secured thereby, and may be 
in the form of trust mortgages or mortgage indentures or deeds of trust 
securing notes, bonds, or other credit instruments. 

(2) The term "mortgagee" means the original lender under a mort- 
gage, and its successors and assigns, and includes the holders of credit 
instruments issued under a trust mortgage or deed of trust pursuant 
to which such holders act by and through a trustee therein named. 

(3) The term "mortgagor" means the original borrower under a 
mortgage and its successors and assigns. 

(4) The term "maturity date" means the date on which the mort- 
gage indebtedness would be extinguished if paid in accordance wdth 
the periodic payments provided for in the mortgage. 

(5) The term "slum or blighted area" means any area where dwell- 

1 Sec. 117(a), Housing and Urban Development Act of 1970, Public Law 91-609 annrovefl 
December 31. 1970, 84 Stat. 1770, 1774, added the remainder of this sentence 

2 Sec. 103(a)(1), Housing and Urban Development Act of 1969. Public Law 91-15'> 
approved December 24, 1969, 83 Stat. 379, 380, substituted "mobile homes" for "trailer- 
coach mobile dwellings". 



202 



NATIONAL HOUSING ACT §207 

ings predominate which, by reason of dilapidation, overcrowding, 
faulty arrangement or design, lack of ventilation, light or sanitation 
facilities, or any combination of these factors, are detrimental to 
safety, health, or morals. 

(6) The term "rental housing" means housing, the occupancy of 
which is permitted by the owner thereof in consideration of the pay- 
ment of agreed charges, whether or not, by the terms of the agreement, 
such payment over a period of time will entitle the occupant to the 
ownership of the premises or space in a mobile home court or park ^ 
properly arranged and equipped to accommodate mobile homes.^ 

(7) The term "State" includes the several States, and^ Puerto 
Eico, the District of Columbia, Guam, the * Trust Territory of the 
Pacific Islands, and the Virgin Islands. 

(b) In addition to mortgages insured under section 203,^ the Sec- 
retary is authorized to insure mortgages as defined in this section 
(including advances on such mortgages during construction) which 
cover property held by — 

(1) Feaeral or State instrumentalities, municipal corporate instru- 
mentalities of one or more States, or limited dividend or redevelop- 
ment or housing corporations restricted by Federal or State laws or 
regulations of State banking or insurance departments as to rents, 
charges, capital structure, rate of return, or methods of operation j or 

(2)^ 'any other mortgagor approved by the Secretary which, 
until the termination of all obligations of the Secretary under the 
insurance and during such further period of time as the Secretary 
shall be the owner, holder, or reinsurer of the mortgage, is regulated 
or restricted by the Secretary as to rents or sales, charges, capital 
structure, rate of return, and methods of operation to such extent and 
in such manner as to provide reasonable rentals to tenants and a rea- 
sonable return on the investment. The Secretary may make such 
contracts with and acquire, for not to exceed $100, such stock or in- 
terest in the mortgagor as he may deem necessary to render effective 
the regulations or restrictions. The stock or interest acquired by the 
Secretary shall be paid for out of the General Insurance Fund, 

1 Sec. 103(a)(1), Housing and Urban Development Act of 1969, Public Law 91-152. 
approved December 24. 1969, 83 Stat. 379, 380, substituted "mobile home court or park" 
for "trailer court or park". 

» Sec. 103(a)(1) Housing and Urban Development Act of 1969. Public Law 91-152, ap- 
proved December 24. 1969, 83 Stat. 379. 380. substituted "mobile homes" for "trailer 
coach mobile dwellings". 

'Sec. 10(a), Alaska Omnibus Act, Public Law 86-70, approved June 25, 1959, 73 Stat. 
141, 142, deleted "Alaska." and sec. 6, Hawaii Omnibus Act, Public Law 86-624, approved 
Julv 12, 1960. 74 Stat. 411. deleted "Hawaii,". 

*Sec. 403(c)(2), Housing and Urban Development Act of 1969. Public Law 91-152, 
approved December 24, 1969, 83 StaL 379, 395, Inserted "the Trust Territory of the Pacific 
Islands,". 

6 Immediately prior to amendment by sec. 607(1), Housing Act of 1961. Public Law 
87-70, approved June 30, 1961, 75 Stat. 149, 178. this paragraph read as follows: 

"(2) Private corporations, associations, cooperative societies which are legal agents of 
owner-occupants, or trusts formed or created for the purpose of rehabilitating slum or 
blighted areas, or providing housine for rent or sale, and which possess powers necessary 
therefor and Incidental thereto, and which, until the termination of all obligations of the 
Commissioner under such Insurajice. are regulated or restricted by the Commissioner as to 
rents or sales, charges, capital structure, rate of return, and methods of operation to such 
extent and In such manner as to provide reasonable rentals to tenants and a reasonable 
return on the Investment. The Commissioner may make such contracts with, and acquire 
for not to exceed $100 such stock or interest In. any such corporation, association, coopera- 
tive society, or trust as he may deem necessary to render effective such restriction or regu- 
lation. Such stock or Interest shall be paid for out of such Housing Fund, and shall be 
redeemed by the corporation, association, cooperative society, or trust at par upon the 
termination of all obligations of the Commissioner under this insurance." 

Sec. 1108(e), Housing and Urban Development Act of 1965, Public Law 89-117, 79 Stat. 
451, 504, approved August 10, 1965, substituted "the General Insurance Fund" for "the 
Housing Fund". 



203 



§207 NATIONAL HOUSING ACT 

and shall be redeemed by the mortgagor at par upon the termination 
of all obligations of the Secretary under the insurance. 

The insurance of mortgages under this section is intended to facili- 
tate particularly the production of rental accommodations, at reason- 
able rents, of design and size suitable for family living. The Secre- 
tary, is therefore, authorized and directed in the administration of 
this section ^ to take action, by regulation or otherwise, which will 
direct the benefits of mortgage insurance hereunder primarily to those 
projects which make adequate provision for families with children, 
and in which every effort has been made to achieve moderate rental 
charges. 

Notwithstanding any other provisions of this section, no mortgage 
shall be insured hereunder ^ unless the mortgagor certifies under oath 
in selecting tenants for the property covered by the mortgage he will 
not discriminate against any family by reason of the fact that there 
are children in the family, and that he will not sell the property while 
the insurance is in effect unless the purchaser so certifies, such certifi- 
cation to be filed with the Secretary. Violation of any such certifica- 
tion shall be a misdemeanor punishable by a fine of not to exceed $500. 

(c) To be eligible for insurance under this section a mortgage on 
any property or project shall involve a principal obligation in an 
amount — 

(2) not to exceed 90 * per centum of the estimated value of the prop- 
erty or project (wlien the proposed improvements are completed) : 
Provided^ That this limitation shall not apply to mortgages on hous- 
ing in ^ Alaska, or in Guam,*^ but such a mortgage may involve a 
principal obligation in an amount not to exceed 90 per centum of the 
amount which the Secretary estimates will be the replacement cost of 
the property or project when the proposed improvements are com- 
pleted (the value of the property or project as such term is used in this 
paragraph may include the land, the proposed physical improvements, 
utilities within the boundaries of the property or project, architect's 
fees, taxes, and interest accruing during construction, and other mis- 
cellaneous charges incident to construction and approved by the Sec- 
retary). And provided further^ That nothing contained in this section 
shall preclude the insurance of mortgages covering existing con- 
struction located in slum or blighted areas, as defined in paragraph 
numbered (5) of subsection (a) of this section, and the Secretary 
may require such repair or rehabilitation work to be completed as is. 



1 Sec. 104(e)(1), Housinj? Act of 1959, Public Law 86-372, approved September 23, 
1959, 73 Stat. 654, 655, deleted "(except provisions relating to housing for eiderly 
persons)". 

2 Sec. 104(e) (1), Housing Act of 1959. Public Law 86-372, approved September 23, 1959. 
73 Stat. 654, 655. deleted "(except with respect to housing designed for elderly persons, 
with occupancy preference therefor, as provided in the paragraph following paragraph (3) 
of subsection (c) )". 

3 Sec. 304(a)(1) of Housing and Community Development Act of 1974, Public Law 
93-383, 88 Stat. 633, approved August 22, 1974, struck para. 207(c)(1) of the National 
Housing Act, hut did not renumber the following paragraphs. 

* Sec. 108(a), Housing Act of 1956, Public Law 1020. 84th Congress, approved August 7," 
1956, 70 Stat. 1091, 1092, substituted "90 per centum" for "80 per centum". 

6 Sec. 106. Housing Act of 1964, Public Law 88-560, approved September 2. 1964, 78 
Stat. 769, 774, deleted a proviso at this point which limited the amount of the mortgage to 
the cost of the physical improvements on the property. 

«Sec. 10(b). Alaska Omnibus Act, Public Law 86-70, approved June 25, 1959, 73 Stat 
141, 142. deleted "the Territory of" at the point indicated. 

' '^^^^^l^^''^^ in Guam" were added by sec. 115(2) of the Housing Act of 1954, Public 
Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590, 595. 

8 This proviso added by sec. 115(1) of the Housing Act of 1954, Public Law 560 83d 
Congress, approved August 2, 1954, 68 Stat. 590, 594. 

204 



NATIONAL HOUSING ACT §207 

in liis discretion, necessary to remove conditions detrimental to safety, 
health, or morals ; and 

(;> ) ^ not to exceed, for such part of the property or projects as may 
be attributable to dwelling use (excluding exterior land improvements 
as defined by the Secretary), $19,500 ^ per family unit without bed- 
room, $21,600 - per family unit with one bedroom, $25,800 - per family 
unit with two bedrooms, $31,800 - per family unit with three bedrooms, 
and 836,000 - per family unit with four or more bedrooms, or not 
to exceed $3,900 - per space except that as to projects to consist of ele- 
vator-type structures the Secretary may, in his discretion, increase the 
dollar amount limitations per family unit to not to exceed $22,500 - 
per family unit without a bedroom, $25,200 - per family unit with one 
bedroom, $30,900 - per family unit with two bedrooms, $38,700 ^ per 
family unit with three bedrooms, and $43,758 ^ per family unit with 
four or more bedrooms, as the case may be, to compensate for the higher 
costs incident to the construction of elevator type structures of sound 
standards of construction and design; and except that the Secretary 
may, by regulation, increase any of the foregoing dollar amount 
limitations contained in this paragraph by not to exceed 50 per centum 
in any geographical area ^ where he linds that cost levels so require. 
The mortgage shall provide for complete amortization by periodic 
payments within such term as the Secretary shall prescribe, and 
shall bear interest (exclusive of premium charges for insurance) at 
not to exceed 5I/4 * per centum per annum on the amount of the prin- 
cipal obligation outstanding at any time, or ^ not to exceed such per- 
centuni per annum not in excess of 6 i)er centum as the Secretary finds 
necessary to meet the mortgage market. The Secretary may consent 
to the release of a part or parts of the mortgaged property from the 

1 Sof. 107(a). Housing Act of 1964. Public Law 88-560, approved September 2, 1964, 
78 Stat. 709, 774, deleted the previous per room limits in this par. (3) on the amount 
of a mortfjage and substituted dollar amount limitations based on the number of family 
units in the project with the dollar amount limitations varying according to the number 
of bedrooms in eacli unit. 

Sec. 1 13(b). Housing and Urban Development Act of 1969, Public Law 91-152, ap- 
proved December 24, 1969, 83 Stat. 379, 383, increased by ten percent as shown in the text 
the dollar limits in this paragraph (3) except mobile home courts. Sec. 103(b), Housing 
and Urban Development Act of 1969, Public Law 91-152, approved December 24. 1969, 
83 Stat. 379, 380, increased the maximum amount of a mortgage which may be insured 
for a mobile home court from .$1,800 to $2,500 per space or from .$500,000 to .$1,000,000 
per project mortgage. Sec. 304(a)(2) of Housing and Community Development Act of 
1974. Public Law 93-383, 88 Stat. 033, approved August 22, 1974, deleted the words "or 
$1,000,000 per mortgage for trailer courts or parks ;". 

2 Sec. 303(a)(1) of Housing and Community Development Act of 1974. Public Law 
93-383. 88 Stat. 033. approved August 22. 1974, substituted "$13,000^' for "$9,900", 
".$18,000" for "$13,750". "$21,500" for "$16,500", "$26,500" for "$20,350", "$30,000" for 
"$23,100", and "$3,250" for "$2,500". 

Sec. ."03(a)(2) of such Act. substituted "$15,000" for "$11,5'50", "$21,000" for 
"$16,500", "$25,750" for "$19,800", "$32,250" for "$24,750", and "$36,465" for "$28,050". 

Sec. 8(b)(1)(A) of the Housing Authorization Act of 1976. Public Law 94-375. ap- 
proved August 3, 1976, 90 Stat. 1067, amended section 207(c)(3) of the National Hous- 
ing Act by substituting "$19,500" for "$13,000", "$21,600" for "$18,000", "$25,800" 
for "$21,500", "$31,800" for "$26,500", "$36,000" for "$30,000", and "$3,900" for 
"$3,250". Sec. 8(b)(1)(B) of such Act amended this section by substituting "$22,500" 
for "$15,000". "$25,200" for "$21,000", "$30,900" for "$25,750", "$38,700" for "$32,250", 
and "$43,758" for "$36,465". 

»Sec. 3 of Public Law 94-173, 89 Stat. 1027, approved December 23, 1975, amended 
sec. 207(c)(3) of the National Housing Act by deleting the words "by not to exceed 45 
per centum in any geographical area" and inserting the words "by not to exceed 75 per 
centum in any geographical area". Sec. 8(a) of the Housing Authorization Act of 1976, 
Public Law 94-375, approved August 3, 1976, 90 Stat. 1067, amended section 207(c)(3) 
of the National Housing Act by deleting the words "by not to exceed 75 per centum 
in any geographical area" and Inserting in lieu thereof "by not to exceed 50 per centum 
in any geographical area". 

*Sec. 104(c), Housing Act of 1959. Public Law 86-372, approved September 23, 1959, 
73 Stat. 6.14, 655. substituted "5V^" for "4V>". 

6 Sec. 3(b), Public Law 90-301, approved May 7. 1968, 82 Stat. 113, 114 inserted the 
balance of this sentence. See also, sea 3 ('a). Public Law 90-301, immediately following 
the National Housing Act In this compilation, which permits the Secretary until October 1, 
19G9, to set a higher interest rate. 

205 



§207 NAl'IONAL HOUSING ACT 

lien of the mortgage upon such terms and conditions as he may pre- 
scribe and the mortgage may provide for such release. No mortgage 
shall be accepted for insurance under this section or section 210 unless 
the Secretary finds that the property or project, with respect to which 
the mortgage is executed, is economically sound. Such property or 
project may include five ^ or more family units and ^ may include 
such commercial and community facilities as the Secretary deems ade- 
quate to serve the occupants. 

Notwithstanding any other provision of this paragraph, the amount 
which may be insured under this section may be increased by up to 20 
percent if such increase is necessary to account for the increased cost of 
the project due to the installation of a solar energy system (as defined 
in subparagraph (3) of the last paragraph of section 2(a) of this Act) 
therein.^ 

(d) The Secretary shall collect a premium charge for the insurance 
of mortgages under this section which shall be payable annually in 
advance by the mortgagee, either in cash or in debentures issued by the 
Secretary under any title and section of this Act, except debentures of 
the Mutual Mortgage Insurance Fund, or of the Cooperative Manage- 
ment Housing Insurance Fund, at par plus accrued interest. In addi- 
tion to the premium charge herein provided for, the Secretary is 
authorized to charge and collect such amounts as he may deem reason- 
able for the appraisal of a property or project offered for insurance 
and for the inspection of such property or project during construction : 
Provided^ That such charges for appraisal and inspection shall not 
aggregate more than 1 per centum of the original principal face 
amount of the mortgage. 

(e) In the event that the principal obligation of any mortgage 
accepted for insurance under this section is paid in full prior to the 
maturity date, the Secretary is authorized in his discretion to re- 
quire the payment by the mortgagee of an adjusted premium charge 
in such amount as the Secretary determines to be equitable, but not 
in excess of the aggregate amount of the premium charges that the 
mortgagee would otherwise have been required to pay if the mort- 
gage had continued to be insured until such maturity date. 

(f)^ 

(g) The failure of the mortgagor to make any payment due under 
or provided to be paid by the terms of a mortgage insured under this 
section shall be considered a default under such mortgage and, if such 
default continues for a period of thirty days, the mortgagee shall 
be entitled to receive the benefits of the insurance as hereinafter 
provided, upon assignment, transfer, and delivery to the Secretary, 
within a period and in accordance with rules and regulations to be 
prescribed by the Secretary of (1) all rights and interests arising 
under the mortgage so in default; (2) all claims of the mortgagee 
against the mortgagor or others, arising out of the mortgage transac- 
tions; (3) all policies of title or other insurance or surety bonds or - 
other guara nties and any and all claims thereunder; (4) any balance of 

1 Sec. 311(a), Housing and Community Development Amendments of 1978, P.L. 95-557, 
92 Stat. 2080, approved October 31, 1978, substituted "five" for "eight". 

2 The phrase "may include eight or more family units and" inserted bv sec. 102(b)(5) 
of the Housing Amendments of 1955, Public Law 345, 84th Congress, approved August 11, 
1955, 69 Stat. 635. 

3 This sentence was added by sec. 248(b). National Energy Conservation Policy Act, Pub. 
Law 95-619, 92 Stat. 3206, approved November 9. 1978. 

* Deleted by sec. 1108(e)(3), Housing and Urban Development Act of 1965, Public Law 
89-117, approved August 10, 1965, 79 Stat. 451, 504. - 

206 



NATIONAL HOUSING ACT §207 

the mortorage loan not advanced to the mortgagor; (5) any cash or 
property held by the mortgagee, or to which it is entitled, as deposits 
iriade for the account of the mortgagor and which have not been applied 
in reduction of the principal of the mortgage indebtedness; and (6) 
all records, documents, books, papers, and accounts relating to the 
mortgage transaction. Upon such assignment, transfer, and delivery 
the obligation of the mortgagee to pay the premium charges for mort- 
gage insurance shall cease, and the Secretary shall, subject to the 
cash adjustment provided for in subsection (j) , issue to the mortgagee 
a certificate of claim as provided in subsection (h), and debentures 
having a total face value equal to the original principal face amount 
of the mortgage plus such amount as the mortgagee may have paid for 
(A) taxes, special assessments, and water rates, which are liens prior 
to the mortgage; (B) insurance on the property; and (C) reasonable 
expenses for the completion and preservation of the property and any 
mortgage insurance premiums paid after default, less the sum of (i) 
that part of the amount of the principal obligation, that has been 
repaid by the mortgagor, (ii) an amount equivalent to 1 per centum 
of the unpaid amount of such principal obligation, and (iii) any net 
income received by the mortgagee from the property : Provided^ That 
tlie mortgagee in the event of a default under the mortgage may, at its 
option and in accordance with regulations of, and in a period to be 
determined by, the Secretary, proceed to foreclose on and obtain 
possession of or otherwise acquire such property from the mortgagor 
after default, and receive the benefits of the insurance as herein pro- 
vided, upon (1) the prompt conveyance to the Secretary of title 
to the property which meets the requirements of the rules and regula- 
tions of the Secretary in force at the time the mortgage was in- 
sured and wliich is evidenced in the manner prescribed by such rules 
and regulations, and (2) the assignment to him of all claims of the 
mortgagee against the mortgagor or others, arising out of the mortgage 
transaction or foreclosure proceedings, except such claims that may 
have been released with the consent of the Secretar\^ Upon such con- 
veyance and assignment, the obligation of the mortgagee to pay the 
premium charges for insurance shall cease and the mortgagee shall be 
entitled to receive the benefits of the insurance as provided in this 
subsection, except that in such event the 1 per centum deduction, set 
out in (ii) hereof, shall not apply. Notwithstanding^ any other 
provision of this Act. upon receipt, after the date of enactment of 
the Housing Act of 1964, of an application for insurance benefits 
on a mortgage insured under this Act, the Secretary may terminate the 
mortgagee's obligation to pay premium charges on the mortgage. 

(h) The certificate of claim issued under this section shall be for an 
amount which the Secretary determines to be sufHcient, when added 
to the face value of the debentures issued and the cash adjustment 
paid to the mortgagee, to equal the amount which the mortgagee 
would have received if, on the date of the assignment, transfer and 
delivei'v to the Secretary provided for in subsection (g), the mort- 
gagor had extinguished the mortgage indebtedness by payment in 
full of all obligations under the mortgage and a reasonable amount 
for necessary expenses incurred by the mortgagee in connection with 
the foreclosure proceedings, or the acquisition of the mortgaged prop- 
erty otherwise, and the convevance thereof to the Secretary. Each 



^Tbls sentence added by pec. 105(5), Housing Act of 19G4, Public Law 88-560, approved 
September 2, 1964, 78 Stat. 769. 772. 

207 



§207 NATIONAL HOUSING ACT 

such certificate of claim shall provide that there shall accrue to the 
holder of such certificate with respect to the face amount of such cer- 
tificate, an increment at the rate of 3 per centum per annum which 
shall not be compounded. If the net amount realized from the mort- 
gage, and all claims in connection therewith, so assigned, transferred, 
and delivered, and from the property covered by such mortgage and 
all claims in connection with such property after deducting all ex- 
penses incurred by the Secretary in handling, dealing with, acquir- 
ing title to, and disposing of such mortgage and property and in 
collecting such claims, exceeds the face value of the debentures issued 
and the cash adjustment paid to the mortgagee plus all interest paid 
on such debentures, such excess shall be divided as follows : 

(1) If such excess is greater than the total amount payable under 
the certificate of claim issued in connection with such property, the 
Secretary shall pay to the holder of such certificate the full amount 
so payable, and an}^ excess remaining thereafter shall be retained by 
the Secretary and credited to the General Insurance Fund ; and 

(2) If such excess is equal to or less than the total amount payable 
under such certificate of claim, the Secretary shall pay to the holder 
of such certificate the full amount of such excess. 

(i) Debentures issued under this section, except^ that debentures 
issued pursuant to the provisions of section 220(f), 221(g), and sec- 
tion 233 may be dated as of the date the mortgage is assigned (or the 
property is conveyed) to the Secretary, shall be executed in the name 
of the General Lisurance Fund as obligor, shall be signed by the 
Secretary, by either his written or engraved signature, shall be nego- 
tiable, and shall be dated as of the date of default as determined in 
subsection (g) of this section and shall bear interest from such date. 
They shall bear interest at a rate ^ established by the Secretary pur- 
suant to section 224, payable semiannually on the 1st day of January 
and the 1st day of July of each year, and shall mature twenty ^ years 
after the date thereof. Such debentures as are issued in exchange for 
mortgages insured after the date of enactment of the National Hous- 
ing Act Amendments of 1938 shall be exempt, both as to principal 
and interest, from all taxation (except surtaxes, estate, inheritance, 
and gift taxes) now or hereafter imposed by the United States ^ by 
any Territory, dependency, or possession thereof, or by any State, 
county, municipality, or local taxing authority. They shall be paid out 
of the General Insurance Fund which shall be primarily liable there- 
for and they shall be fully and unconditionally guaranteed as to prin- 
cipal and interest by the United States, and such guaranty shall be 
expressed on the face of the debentures. In the event the General In- 
surance Fund fails to pay upon demand, when due, the principal of 
or interest on any debentures so guaranteed, the Secretary of the 
Treasury shall pay to the holders the amount thereof which is hereby 
authorized to b<^. appropriated, out of any money in the Treasury not 

5 Sec. R07f4), Hnnslnfr Act of 1961, PubHc Law 87-70, approved June 30, 1961, 75 Stat. 
149, 178, Inserted this clause. 

2 Sec. 108(b) of the Housing Act of 1957. Public Law 85-104, approved July 12, 1957, 
71 Stat. 294, 297. substituted "established by the Commissioner pursuant to section 224." 
for "determined by the Commissioner, with the approval of the Secretary of the Treasury, 
at the time the mortgage was insured, but not to exceed 3 per centum per annum." 

3 Sec. 112(b) of the Housinc Act of 1954, I^ubllc Law 560. s;-!d Congress, approved 
August 2, 1954. 68 Stat. 590. 593, substituted the word "twenty" for the word "ten" but 
section n2(e) of the Housing Act of 1954 provided that this amendment did "not apply 
in any case where the mortgage Involved was insured or the commitment for such Insurance 
was Issued prior to the effective date of the Housing Act of 1954" (August 2, 1954). 

* Debentures issued In connection with contracts entered into pursuant to commitments 
Issued on or after March 1, 1941, do not carrv such Federal tax exemption. See sec 4. 
Tubltc Debt Act of 1941, as amended, 31 U.S.C. 742a. 

208 



NATIONAL HOUSING ACT §207 

otherwise appropriated, and thereupon, to the extent of the amount 

so paid, the Secretary of the Treasury shall succeed to all the rights 
of the holders of such debentures. 

(j) Debentures issued under this section shall be in such form and 
denominations in multiples of $50, shall be subject to such terms and 
conditions, and shall include such provision for redemption, if any, 
as may be prescribed by the Secretary with the approval of the 
Secretary of the Treasury and may be in coupon or registered form. 
Any difference between the amount of debentures to which the mort- 
gairee is entitled under this section, and the aggregate face value of the 
debentures issued, not to exceed $50 shall be adjusted by the payment 
of cash by the Secretary to the mortgagee from the General Insurance 
Fund. 

(k) The Secretary is hereby authorized either to (1) acquire pos- 
session of and title to any property, covered by a mortgage insured 
under this section and assigned to him, by voluntary conveyance in 
extinguishment of the mortgage indebtedness, or (2) institute proceed- 
ings for foreclosure on the property covered by any such insured mort- 
gage and prosecute such ju'oceedings to conclusion.^ The Secretary 
at any sale under foreclosure may, in liis discretion, for the protection 
of the General Insurance Fund, bid any sum up to but not in excess 
of the total unpaid indebtedness secured by the mortgage, plus taxes, 
insurance, foreclosure costs, fees, and other expenses, and may become 
the purchaser of the property at such sale. The Secretary is authorized 
to pay from the General Insurance Fund such sums as may be necessary 
to defray such taxes, insurance, costs, fees, and other expenses in con- 
nection with the acquisition or foreclosure of property under this sec- 
tion. Pendin^r such acquisition by voluntary conveyance or by foreclo- 
sure, the Socrotary is authoiized, with respect to any mortgage assigned 
to him under the provisions of subsection (g), to exercise all the rights 
of a mortagee under such mortgage, including the right to sell such 
mortgage, and to take such action and advance such snms as may be 
necessary to preserve or protect the lien of such mortgage. 

(1) Notwithstanding any other provisions of law relating to the 
acquisition, handlinir, or disposal of real and other property by the 
United States, the Secretary shall also have power, for the protection 
of the interests of the General Insurance Fund, to pay out of the 
General Insurance Fund all expenses or charges in connection with, 
and to deal with, complete, reconstruct, rent, renovate, modernize, 
insure, make contracts for the management of, or establish suitable 
agencies for the management of, or sell for cash or credit or lease in 
Ins discretion, any property acquired by him under this section ; and 
notwithstanding any other provision of law, the Secretary shall also 
have power to pursue to final collection by way of compromise or oth- 
erwise all claims assigned and transferred to him in connection witli 
the assignment, transfer, and delivery provided for in this section, and 
at any time, upon default, to foreclose on any property secured by any 
mortgage assigned and transferred to or heM hj him : Provided, '^That 
section 3709 of the Eevised Statutes shall not be construed to apply to 
any contract for hazard insurance, or to any purchase or contract for 
services or supplies on account of such property if the amount thereof 

-pi^r^„^^-'?- .^^.''"^^r^ '^^^ of 1964. Pnhllo Law S8-560. approved Soptembor 2. 1964, 78 ^tnt. 
tn ann,',-; '^^^^^^^ ^^^ s^ecoTid ^outeuce of this subsec. (k) which requirod the Secrfttary 

209 



§209 NATIONAL HOUSING ACT 

does PxOt exceed $1,000. 

{my 

(n) 'In the event that a mortgage insured under this section becomes 
in default through failure of the mortgagor to make any payment due 
under or provided to be paid by the terms of the mortgage and such 
mortgage continues in default for a period of thirty days, but the 
mortgagee does not foreclose on or otherwise acquire the property, or 
does not assign and transfer such mortgage and the credit instrument 
secured thereby to the Secretary, in accordance with subsection (g), 
and the Secretary is given written notice thereof, or in the event 
that a mortgagor pays the obligation under the mortgage in full 
prior to the maturity thereof, and the mortgagee pays any adjusted 
premium charge required under the provisions of subsection (e), and 
the Secretary is given written notice by the mortgagee of the pay- 
ment of such obligation, the obligation to pay the annual premium 
charge for insurance shall cease, and all rights of the mortgagee and 
the miortgagor under this section shall terminate as of the date of such 
notice. 

(o) The Secretary, with the consent of the mortgagee and the 
mortgagor of a mortgage insured under this section prior to the date 
of enactment of the National Housing Act Amendments of 1938, shall 
be empowered to reissue such mortgage insurance in accordance with 
the provisions of this section as amended by such Act, and any such 
insurance not so reissued shall not be affected by the enactment of such 
Act. 

(q) Repealed.^ 

(r)* Notwithstanding any other provision of this Act, the Secre- 
tary is authorized to include in any mortgage insured under any title 
of this Act after the effective date of the Housing Act of 1959 ^ a pro- 
vision requiring the mortgagor to pay a service charge to the Secretary 
in the event such mortgage is assigned to and held by the Secretary. 
Such service charge shall not exceed the amount prescribed by the 
Secretary for mortgage insurance premiums applicable to such 
mortgage. 

TAXATION PROVISIONS 

Sec. 208. Nothing in this title shall be construed to exempt any real 
property acquired and held by the Secretary under this title from 
taxation by any State or political subdivision thereof, to the same ex- 
tent, according to its value, as other real property is taxed. 

STATISTICAL AND ECONOMIC SURVEYS 

Sec. 209. The Secretary shall cause to be made in connection with 
the insurance programs such statistical surveys and legal and eco- 
nomic studies as he shall deem useful to guide the development of 
housing and the creation of a sound mortgage market in the United. 
States, and shall publish from time to time the results of such surveys 
and studies. Expenses of such studies and surveys, and expenses of 

1 Deleted by sec. 1108(e) (3), Housing and Urban Development Act of 1965, Public Law 
89-117, approved August 10, 1965, 79 Stat. 451, 504. 

2 Deleted by sec. 1108(e) (3). Housing and Urban Development Act of 1965, Public Law 
89-117, approved August 10, 1965, 79 Stat. 451. 504. 

3 Repealed by sec. Ill, Housing Act of 1957. Public Law 85-104, approved July 12, 1957. 
71 Stat. 294, 297. 

*Sec. 104(d). Housing Act of 1959, Public Law 86-372, approved September 23, 1959. 

''September 23, 1959. 

210 



NATIOXAL HOUSING ACT §210 

publication and distribution of the resultr^ of such studies and sur- 
veys, shall be charged as a general expense of such insurance fund 
or funds, as the Secretary shall determine. 

ADDITIOXAL HOUSING INSURANCE 

Sec. 210. Kepealed.^ 

RULES AND REGULATIONS 

Sec. 211. The Secretary is authorized and directed to make such 
rules and regulations as may be necessar}^ to carry out the provisions 
of this title. 

LABOR STANDARDS 

Sr:c. 212. (a) The Secretary shall not insure under section 207 or 
section 210 of this title, or under section 608 of title VI, pursuant to 
any application for insurance filed subsequent to the effective date of 
this section, or under section 213 of this title, or under title YII pur- 
suant to any application filed subsequent to sixty days after the date 
of enactment of the Housing Act of 1950, or under section ^ 803 or 810 
of title VIII, or under section 908 of title IX, a mortgage or invest- 
ment which coveis property on which there is or is to be located a 
dwelling or dwellings, or a housing project, the construction of which 
was or is to be commenced subsequent to such date, unless the principal 
contractor files a certificate or certificates (at such times, in course of 
construction or otherwise, as the Secretary may prescribe) certifying 
that the laborers and mechanics employed in the construction of the 
dwelling or dwellings or the hoMsini!: project involved have been paid 
not less than tb.e wages prevailing in the locality in which the work 
was performed for the corresponding classes of laborers and mechanics 
employed on construction of a similar character, as determined by the 
Secretary of I^abor in ^ accordance with the Davis-Bacon Act, as 
amended (40 U.S.C. 276a — 276a-5), prior to the beginning of con- 
struction and after the date of the filing of the application for insur- 
ance. The * provisions of this section shall also apply to the insurance 
of any loan or mortgage uiuier section 220 or section 233 which covers 
property on which there is located a dwelling or dwellings designed 
principally for residential use for twelve or more families. The pro- 
visions of this section shall apply to the insurance under section 221 of 
any mortgage described in subsection (d)(3)^ or (d)(4) and® 
(deeming the term "construction" as used in the first sentence of this 
subsection to mean rehabilitation) of any mortgage described in sub- 

iRepcnlPd bv Public Law 111, 70th ronqress. approved June 3, 19S9. 53 Stat. 804. 

2Spo. 704(c), Housing Aot of 1039, Pub'.ic Law 86-372, approved September 23. 1959, 
73 Stat. 654. 680. added "section 803 or 810 of". 

'Tlie words "in ac"ordnnce with the D;ivis-Bncon Act, as amended." topether with the 
code citation inserted by sec. 3 of Public Law 89-349, approved July 2, 1964, 78 Stat. 238, 

♦This sentPnce added bv sec. lis. Housing Act of 19.")4, Public Law ^(^0. S.'^d Congress, 
approved An<rust 2, 1054, 68 Stat. o90, 505. and amended by sec. 612(e)(1), Housing Act 
of 1961, Public Law 87-70, approved June .30. 1061. 75 Stat. 149, 181. by substituting "any 
loan or mortgage under section 220 or section 233" for "any mortgage under section 220." 

^Tlie words "in the case of a cooperative or .i limited profit mortgagor." deleted -it this 
point by sec. 102 ^c). Housing and Urban Development Act of 1965, Public Law 89-117, 
approved August 10. 1965. 79 Stat. 451. 454. „ ^„ 

«Sec. 311, Demonstration Citips and >retropolltan Development Act of 1966. Public 
Law 89-754, approved November 3, 1966, 80 Stat. 1255, 1270, added the remainder of thl.s 
sentence. 



211 



§212 NATIONAL HOUSING ACT 

section (h) (1) or ^ section 235 (j) (1) which covers property on which 
there is located a dwelling or dwellings designed principally for resi- 
dential use for more than eight families ; except that compliance with 
such provisions may be waived by the Secretary — 

(1) with respect to mortgages described in such subsection 
(d) (3) or (d) (4) in cases or classes of cases where laborers or 
mechanics (not otherwise employed at any time in the construc- 
tion of the r>roject) voluntarily donate their services without com- 
pensation tor the purpose of lowering their housing costs in a co- 
operative housing project and the Secretary determines that any 
amounts saved thereby are fully credited to the cooperative under- 
taking the construction, and 

(2) with respect to mortgages described in such subsection 
(h) (1) or section 235 (j) (1)^, in cases or classes of cases where 
prospective owners of such dwellings voluntarily donate their 
services without compensation, or other persons (not otherwise 
employed at any time in the rehabilitation of the property) vol- 
untarily donate their services without compensation, and the 
Secretary determines that any amounts saved thereby are 
fully credited to the nonprofit organization undertaking the 
rehabilitation. 

The 2 provisions of this section shall also apply to the insurance of 
any mortgage under section 231, 232, or 236 ^ except that compliance 
with such provisions may be waived by the Secretary in cases or classes 
of cases where laborers or mechanics, not otherwise employed at any 
time on the project voluntarily donate their services without full com- 
pensation for the purpose of lowering the costs of construction and the 
Secretary determines that any amounts thereby saved are fully credited 
to the nonprofit corporation, association, or other organization under- 
taking the construction. The * provisions of this section shall also apply 
to the insurance of any mortgage under section 234(d). The® provi- 
sions of this section shall also apply to the insurance of any mortgage 
under section 242, except that compliance with such provisions may be 
waived by the Secretary in cases or classes of cases where laborers or 
mechanics, not otherwise employed at any time on the project, volun- 
tarily donate their services without compensation for the purpose of 
lowering the costs of construction and the Secretary determines that 
any amounts thereby saved are fully credited to the nonprofit corpora- 
tion, association,^ or other organization undertaking the construction ; 
and each laborer or mechanic employed on any facility covered by a 
mortgage insured under section 242 shall receive compensation at a 
rate not less than one and one-half times his basic rate of pay for all 
hours worked in any workweek in excess of eight hours in any work- 
day or forty hours in the workweek, as the case may be. The "^ provi- 

1 Sec. 101(d), Housing and Urban Development Act of 1968, Public Law 90-448, ap- 
proved August 1, 1968, 82 Stat. 476, 484, inserted "or section 235(j)(l)". 

a This sentence added by sec. 201(b), Housing Act of 1959, Public Law 86-372, approved 
September 23. 1959, 73 Stat. 654, 667. 

3 Sec. 201(b)(1), Housing and Urban Development Act of 1968, Public Law 90-448, 
approved August 1, 1968, 82 Stat. 476, 501, inserted "or 236". 

* Sec. 119(b), Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 
Stat. 769. 782. added this sentence. 

8 Sec. 1502. Housing and Urban Development Act of 1968, Public Law 90-448, approved 
August 1, 1968, 82 Stat. 476, 600, inserted this sentence. 

« The words "or other organization" inserted by sec. 110(c), Housing and Urban Devel- 
opment Act of 1970. Public Law 91-609, approved December 31, 1970, 84 Stat. 1770. 1772. 

'Sec. 201(b)(4), Housing and Urban Development Aet of 1965, Public Law 89-117, 
approved August 10, 1965, 79 Stat. 451, 465, added this sentence. 



212 



NATIONAL HOUSING ACT § 213 

sions of this section shall also apply to insurance under title X with 
respect to laborers and mechanics employed in land development fi- 
nanced with the proceeds of any mortgage insured under that title. 
The ^ provisions of this section shall also apply to the insurance of 
any mortgage under title XI ; and each laborer or mechanic employed 
on any facility covered by a mortgage insured under such title shall 
receive compensation at a rate not less than one and one-half times 
his basic rate of pay for all hours worked in any workweek in excess 
of eight hours in any workday or forty hours in the workweek, as the 
case may be. 

(b) The Secretary is authorized to make such rules and regulations 
as may be necessary to carry out the provisions of this section. 

(c) There is hereby authorized to be appropriated for the remainder 
of the fiscal year ending June 30, 1939, and for each fiscal year there- 
after, a sum sufficient to meet all necessary expenses of the Department 
of Labor in making the determinations provided for in subsection (a). 



Sec. 213.^ (a) In addition to mortgages insured under section 207 
of this title, the Secretary is authorized to insure mortgages as 
defined in section 207(a) of this title (including advances on such 
mortgages during construction), wliich cover property held by — 

(1) a nonprofit cooperative ownership housing corporation or 
nonprofit cooperative ownership housing trust, the permanent oc- 
cupancy of the dwellings of which is restricted to members of 
such corporation or to beneficiaries of such trust ; 

(2) a nonprofit corporation or nonprofit trust organized for the 
purpose of construction of homes for members of the corporation 
or for beneficiaries of the trust ; or 

(3) * a mortgagor, approved by the Secretary, which (A) 
has certified to the Secretary, as a condition of obtaining the 
insurance of a mortgage under this section, that upon completion 
of the property or project covered by such mortgage it intends to 
sell such property or project to a nonprofit corporation or non- 
profit trust of the character described in paragraph (1) of this 
subsection at the actual cost of such property or project as certified 
pursuant to section 227 of this Act and will faithfully and dil- 
igently make and carry out all reasonable efforts to consummate 
such sale, and (B) shall be regulated or restricted by the Secre- 
tary as to rents, charges, capital structure, rate of return, and 
methods of operation during any period while it holds the mort- 
gaged property or project; and, for such purpose the Secre- 
tary may make such contracts with, and acquire for not to ex- 
ceed $100 such stock or interest in, any such mortgagor as the 
Secretary may deem necessary to render effective such restriction 
or regulation, such stock or interest to be paid for out of the Co- 
operative JNIanagement Housing Insurance Fund and to be re- 

^ Sec. 503. Demonstration Cities and Metropolitan Development Act of 1966, Public Law 
^I*"^^' approved November 3, 1966. 80 Stat. 1255, 1277. added this sentence. 
'See also sec. 305(e), National Housing Act, as amended, which authorizes the Federal 

^ational Mortgage Association to enter Into advance commitments to purchase FHA 

cooperative housing mortgages. 

» Sec. 114. Housing Act of 1950, Public Law 475. 81st Congress, approved April 20, 1950, 

64 Stat. 54. added this section. 

, * Sec. 105(a). Housing Act of 1956, Public Law 1020, 84th Congress, approved August 7, 

1956. 70 Stat 1091. 1093. added this paragraph. 

218 



§213 



NATIONAL HOUSING ACT 



deemed by such mortgagor at par upon the sale of such property 
or^project to such nonprofit corporation or nonprofit trust; 
which corporations or trusts referred to in paragraphs (1) and (2) of 
this subsection are regulated or restricted for the purposes and in the 
manner provided in paragraphs numbered (1) and (2) of subsection 
(b) of section 207 of this title: Promded^ That as applied to mort- 
gages the mortgage insurance for which is the obligation of the Man- 
agement Fund, the reference to the General Insurance Fund in section 
207(b) (2) shall be construed to refer to the Management Fund. 

(b) To be eligible for insurance under this section a mortgage on 
any property or project of a corporation or trust of the character de- 
scribed in paragraph numbered (1) of subsection (a) of this section 
shall involve a principal obligation in an amount — 

(2)^ not to exceed, for such part of the property or project as 
may be attributable to dwelling use (excluding exterior land im- 
provements as defined by the Secretary), $19,500* per family 
unit without a bedroom, $21,600 * per family unit with one bed- 
room, $25,800 * per family unit with two bedrooms, $31,800 ^ per 
family unit with three bedrooms, and $36,000 * per family unit 
with four or more bedrooms, and not to exceed 98 per centum ^ of 
the amount which the Secretary estimates will be the replace- 
ment cost of the property or project when the proposed physical 
improvements are completed : Provided^ That as to projects to 
consist of elevator-type structures the Secretary may, in his dis- 
cretion, increase the dollar amount limitations per family unit 
to not to exceed $22,500^ per family imit without a bedroom, 
$25,200 « per family unit with one bedroom, $30,900 « per family 
unit with two bedrooms, $38,700 ^ per family unit with three bed- 
rooms, and $43,758 ^ per family unit with four or more bedrooms, 
as the case may be, to compensate for the higher cost incident to 
the construction of elevator-type structures of sound standards of 
construction and design: Provided further^ That the Secretary 
may, by regulation, increase any of the foregoing dollar amount 
limitations contained in this paragraph by not to exceed 50 per 

1 This proviso Inserted by sec. 208(b) (1). Housing and Urban Development Act of 1965, 
Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 469. 

2 Sec. 304(b) of Housing and Community Development Act of 1974. Public Law 93-383, 
88 Stat. 633, approved August 22. 1974, struck para. (1) of sec. 213(b) of the National 
Housing Act, but did not renumber the following paragraphs. 

•See. 107(b), Housing Act of 1964, Public Law 88-560. approved September 2, 1964, 
78 Stat. 769, 774. deleted the previous per room limits in this par. (2) on the amount 
of a mortgage and substituted dollar amount limitation based on the number of family 
units in the project with the dollar amount limitations varying according to the number 
of bedrooms in each imit. 

Sec. 113(c), Housing and Urban Development Act of 1969, Public Law 91-152, approved 
December 24, 1969, 83 Stat. 379, 383, increased by ten percent as shown in the text the 
dollar limits in this paragraph (2). 

* Sec. 303(b)(1) of Housing and Community Development Act of 1974. Public Law 
93-383. 88 Stat. 633, approved August 22. 1974, substituted "$13,000" for "$9,900", 
"$18,000" for "$13,750". ".$21,500" for "$16,500". "$26,500" for "$20,350", and "$30,000". 
for "$23,100". Sec. 8(b)(2)(A) of the Housing Authorization Act of 1976, Public Law 
94-375, approved August 3, 1976, 90 Stat. 1067, amended section 213(b)(2) of the 
National Housing Act by substituting "$19,500" for "$13,000", "$21,600" for "$18,000", 
"$25,800" for "$21,500", "$31,800" for "$26,500", and "$36,000" for "$30,000". 

5 Sec. 311(b) of Housing and Community Development Act of 1974, Public Law 93-383, 
88 Stat. 633, approved August 22, 1974, substituted "98 per centum" for "97 per centum". 

8 Sec. 303(b)(2) of Housing and Community Development Act of 1974, Public Law 
93-383, 88 Stat. 633, approved August 22, 1974, substituted "$15,000" for "$11,550", 
"$21,000" for "$16,500", "$25,750" for "$19,800". "$32,250" for "$24,750". and "$36,465" 
for "$28,050". Sec. 8(b)(2)(B) of the Housing Authorization Act of 1976, Public Law 
94-375, approved August 3, 1976, 90 Stat. 1067, further amended section 213(b)(2) of 
the National Housing Act by substituting "$22,500" for "$15,000", "$25,200" for 
"$21,000", "$30,900" for "$25,750," "$38,700" for "$32,250", "$43,758" for "$36,465". 

214 



NATIONAL HOUSING ACT 11213 

centum in any geographical area ^ where he finds that cost levels so 
require : Provided further^ That in the case of a mortgagor of the 
character described in paragraph (3) of subsection (a) the mort- 
gage shall involve a principal obligation in an amount not to ex- 
ceed 90 per centum of the amount which the Secretary estimates 
will be the replacement cost of the property or project when the 
proposed physical improvements are completed: And provided 
further^ That upon the sale of a property or project by a mort- 
gagor of the character described in paragraph (3) of subsection 
(a) to a nonprofit cooperative ownership housing corporation or 
trust within two years after the completion of such property or 
project the mortgage given to finance such sale shall involve a 
principal obligation in an amount not to exceed the maximum 
amount computed in accordance with this subsection without re- 
gard to the preceding proviso. 

(c) To be eligible for insurance under this section a mortgage on 
any property or project of a corporation or trust of the character 
described in paragraph numbered (2) of subsection (a) of this section 
shall involve a principal obligation in an amount ^ not to exceed a 
sum computed on the basis of a separate mortgage for each single- 
family dwelling (irrespective of whether such dwelling has a party 
wall or is otherwise physically connected with another dwelling or 
dwellings) comprising the property or project, equal to the total of 
each of the maximum principal obligations of such mortgages which 
would meet the requirements of section 203(b) (2) if the mortgagor 
were the owner and occupant who had made any required payment on 
account of the property proscribed in such paragraph.^ 

(d) Any mortgage insured under this section shall provide for com- 
plete amortization by periodic payments within such terms as the Sec- 
retary may prescribe but not to exceed forty years from the beginning 
of amortization of the mortgage, and shall bear interest (exclusive of 
premium charges for insurance) at not to exceed 5^^ * per centum per 
annum on the amount of the principal obligation outstanding at any 
time, or not to exceed such per centum per annum not in excess of 6 per 
centum ^ as the Secretary finds necessary to meet the mortgage market. 
The Secretary may consent to the release of a part or parts of the mort- 
gaged property from the lien of the mortgage upon such terms and 
conditions as he may prescribe and the mortgage may provide for such 
release, and a mortgage on any project of a corporation or trust of the 
character described in paragraph numbered (2) of subsection (a) of 

1 Sec. 3 of Public Law 94-173, 89 Stat. 1027, approved December 23, 1975, amended 
sec. 213(b)(2) of the National Housing Act by deleting the words "by not to exceed 45 
per centum in any geographical area" and inserting the words "by not to exceed 75 per 
centum in any geographical area". Sec. 8(a) of the Housing Authorization Act of 1976, 
Public Law 94-375. approved August 3, 1976, 90 Stat. 1067, amended section 213(b)(2) 
or the National Housing Act by striking the words "by not to exceed 75 per centum in any 
geographical area" and Inserting In lieu thereof "by not to exceed 50 per centum In any 
geographical area". 

"Sec. 304(c) of Housing and Community Development Act of 1974. Public Law 93-383, 
88 Stat. 633. approved Aucrnst 22, 1974. deleted the words "not to exceed $12,500,000 and". 

«Sec. 207(b)(2), Housing and Urban Development Act of 1965, Public Law 89-117, 
approved August 10, 1965. 79 Stat. 451, 467, deleted an alternative celling which provided 
that the amount of the insured mortgage could equal the total amount of the Individual 
mortgages which members of a nonprofit corporation or nonprofit trust could have Insured 
If each member was building his home separately. 

* Sec. 105(d). Housing Act of 1959, Public Law 86-372, approved September 23, 1959, 73 
Stat. 654. 656, substituted "5V. " for "4iA". 

« Sec. 3(c), Public Law 90-301, approved May 7, 1968, 82 Stat. 113, 114, substituted the 
6 per centum maximum for the.53^V per centum maximum. See also. sec. 3(a), Public Law 
90-301. immediately following the National Housing Act In this compilation, which 
permits the Secretary until October 1. 1969, to set a higher Interest rate. 

215 



§213 NATIONAL HOUSING ACT 

this section may provide that, at any time after the completion of the 
construction of the project, such mortgage may be replaced, in whole 
or in part, by individual mortgages covering each individual dwelling 
in the project in amounts not to exceed the unpaid balance of the 
blanket mortgage allocable to the individual property. Each such indi- 
vidual mortgage may be insured under this section. Property covered 
by a mortgage, insured under this section, on a property or project of 
a corporation or trust of the character described in paragraph num- 
bered (1) of subsection (a) of this section may include five^ or more 
family units and may include such commercial and community facili- 
ties as the Secretary deems adequate to serve the occupants. Property ^ 
held by a corporation or trust of the character described in paragraph 
numbered (2) of subsection (a) of this section which is covered by a 
mortgage insured under this section may include such community fa- 
cilities, and property held by a mortgagor of the character described in 
paragraph numbered (3) of subsection (a) of this section which is 
covered by a mortgage insured under this section may include such 
commercial and community facilities, as the Secretary deems adequate 
to serve the occupants. 

(e) The provisions of subsections (d), (e), (g), (h), (i), (j), (k), 
(1), (m), and (n) of section 207 of this title shall be applicable to 
mortgages insured under this section except individual mortgages 
insured pursuant to subsection (d) of this section covering the indi- 
vidual dwellings in the project, and as to such individual mortgages 
the provisions of subsections (a), (c), (d), (e), (f), (g), (h), (j), 
and (k)^ of section 204 shall be applicable: Promded^^ That as ap- 
plied to mortgages or loans the insurance for which is the obligation 
of the Management Fund (1) all references to the General Insurance 
Fund shall be construed to refer to the Management Fund, and (2) 
all references to section 207 shall be construed to refer to subsections 
(a) (1), (a) (3) (if the project involved is acquired by a cooperative 
corporation), (i) and (j) of this section. 

(f ) The Secretary is authorized, with respect to mortgages insured 
or to be insured under this section, to furnish technical advice and 
assistance in the organization of corporations or trusts of the charac- 
ter described in subsection (a) of this section and in the planning, 
development, construction, and operation of their housing projects.^ 

(g) Nothing in this Act shall be construed to prevent the insurance 
of a mortgage under this section covering a housing project designed 
for occupancy by single persons, and dwelling units in such a project 
shall constitute family units within the meaning of this section. 

1 Sec. 608(a)(2), Housing Act of 1961, Public Law 87-70, approved June 30, 1961. 75 
Stat. 149, 179, substituted "five or more family units" for "eight or more family units". 

a Sec. 105(c), Housing Act of 1959, Public Law 86-372, approved September 23, 1959, 
73 Stat. 654. 656. added this sentence. 

3 Sec. 116(b), Housing Act of 1959, Public Law 86-372, approved September 23, 19'59, 
73 Stat. 654, 664, added "(k)". 

* This proviso inserted by sec. 208(b)(2), Housing and Urban Development Act of 1965, 
Public Law 89-117. approved August 10, 1965, 79 Stat. 451. 469. 

5 A provision at the end of subsec. (f) authorizing the appointment of an Assistant 
Commissioner for cooperative housing administration was deleted by sec. 120, Housing Act 
of 1954, Public Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590, 596. The 
First Independent Oifices Appropriation Act. 1954, Public Law 176, 83d Congress, approved 
July 31, 1053, 67 Stat. 298, 315, had previously provided that the position was no longer 
authorized. Sec. 102(h), Housing Amendments of 1955, Public Law 345, 84th Congress, 
approved August 11, 1955, 69 Stat. 635, 636, provided for the appointment of a "Special 
Assistant for Cooperative Housing" and his staff. 



216 



NATIONAL HOUSING ACT §213 

(h)^ In the event that a mortgagor of the character described in 
paragraph (3) of subsection (a) obtains an insured mortgage loan 
pursuant to this section and fails to sell the property or project covered 
by such mortgage to a nonprofit housing corporation or nonprofit hous- 
ing trust of the character described in paragraph (1) of subsection (a) 
hereof, the ^ Secretary is authorized to refuse, for such a period of 
time as he shall deem appropriate under the circumstances, to insure 
under this section any additional investor-sponsor type mortgage 
loans made to such mortgagor or to any other investor-sponsor mort- 
gagor where, in the determination of the Secretary, any of its stock- 
holders were identified with such mortgagor. 

(i) ' Notliing in this Act shall be construed to prevent the insurance 
of a mortgage executed by a mortgagor of the character described in 
paragraph (1) of subsection (a) of this section covering property 
upon which dwelling units and related facilities have been constructed 
prior to the filing of tlie application for mortgage insurance here- 
imder: Provided^ That the Secretary determines that the consumer 
intei-est is protected and that the mortgagor will be a consumer coop- 
erative. In the case of properties other than new construction, the lim- 
itations in this section upon the amount of the mortgage shall be based 
upon the appi'aised value of the property for continued use as a co- 
operative rather than upon the Secretary's estimate of the replacement 
cost. As to any project on which construction was commenced after the 
effective date of this subsection, the mortfjage on such project shall be 
eligible for insurance under tliis section only in those cases where the 
construction was subject to inspection by the Secretary and w^here 
there wcs comj)!iance with the provisions of section 212 of this title. 
As to any project on which construction was commenced prior to the 
effective date of this subsection, such inspection, and compliance with 
the provisions of section 212 of this title, shall not be a prerequisite. 

(j)(l)* With respexit to any property covered b}- a mortgage in- 
sured under this section (or any cooperative housing project covered 
by a mortgage insured under section 207 as in effect prior to the enact- 
ment of the Housing Act of 1950), the Secretary is authorized upon 
sucli terms and conditions as he may prescribe, to make commit- 
nients to insure and to insure supplementary cooperative loans (includ- 
ing advances during construction or improvement) made by financial 
institutions approved by the Secretary. The ^ Secretary is further au- 
thorized to make commitments to insure and to insure supplementary 
cooperative loans (including advances during construction or improve- 
ment) with respect to any property purchased from the Federal Gov- 
ernment by a nonprofit corporation or trust of the character described 
in paragraph (1) of subsection (a), if the property is covered by an 
f 

lAdied by sec. lOnfc). Houslnr: Act of 1956, Public Law 1020, 84th Congress, approved 
August 7. 195fi. 70 Stat. 1091. 1094. 

"Immediately prior to amendment by sec. 608 fa) (^3), Housing Act of 1961, Public Law 
87-70, anprcvod June 30. 1961, To Stat. 149, 179, the remainder of this paragraph read: 
"such mortgagor shall not thereafter be eligible by reason of such paragraph (3) for in- 
surance of any additional mortgage loans pursuant to this section." 

' Added by Fee. 105(c), Housing Act of 1959, Public Law 86-372, approved September 23, 
1959, 73 Stat. 654. 656. 

* Sec. 608(b), Housing Act of 1961, Public Law 87-70, approved June 30, 1961. 75 Stat. 
149. 179. added subsec. (j). 

5 Sec. 313, Housing and Urban Development Act of 1968, Public Law 90-448, approved 
August 1, 1968, 82 Stat. 476, 511. added this sentence. 



145-701+ 0-79-15 217 



5 213 NATIONAL HOUSING ACT 

uninsured mortgage representing a part of the purchase price. As used 
in this subsection "supplementary cooperative loan'' means a loan, 
advance of credit, or purchase of an obligation representing a loan or 
advance of credit made for the purpose of financing any ot the 

following: . , ^ i t_ i 

(A) Improvements or repairs of the property covered by such 

mortgage; . , „ 

(B) Community facilities necessary to serve the occupants ot 

the property ; or , - i i • • 

(C)^ Cooperative purchases and resales of memberships m 
order to provide necessary refinancing for resales of memberships 
which involve increases in equity; but in such resales by the 
cooperative the downpayments by the new members shall not be 
less than those made on the original sales of such memberships. 
(2) To be eligible for insurance under this subsection, a supple- 
mentary cooperative loan shall — 

(A) be limited to an amount which, when added to the out- 
standing mortgage indebtedness on the property, creates a total 
outstanding indebtedness which does not exceed the original prin- 
cipal obligation of the mortgage ; except ^ that, in the case of im- 
provements or additional community facilities, the outstanding 
indebtedness may be increased by an amount equal to 97 per cen- 
tum of the amount which the Secretary estimates will be the value 
of such improvements or facilities, and the new outstanding in- 
debtedness may exceed the original principal obligation of the 
mortgage if such new outstanding indebtedness does not exceed 
the limitations imposed by subsection (b) ; 

(B) have a maturity satisfactory to the Secretary but not to 
exceed the remaining term of the mortgage ; except ^ that, in the 
case of repairs or improvements to a property covered by an 
uninsured mortgage dated more than twenty years prior to the 
date of the commitment to insure, of such magnitude that the 
Secretary deems them to be a major rehabilitation or moderniza- 
tion of such property, the loan may have a maturity date up to ten 
years in excess of the remaining term of the uninsured mortgage ; 

(C) be secured in such manner as the Secretary may require; 

(D) contain such other terms, conditions, and restrictions as 
the Secretary may prescribe ; and 

(E) represent the obligation of a borrower of the character 
described in paragraph (1) of subsection (a). 

(k)* There is hereby created a Cooperative Management Housing 
Insurance Fund (hereinafter referred to as the "Management Fund"). 
The Management Fund shall be used by the Secretary as a revolv- 
ing fund for carrying out the provisions of this section with respect 
to mortgages or loans insured, on or after the date of the enactment 
of this subsection, under subsections (a)(1), (a)(3) (if the project is 

ISC'*. 109 fa). HoiisinEC Act of 1964, Public Law 88-560, approved September 2, 1964, 78 
Stat. 769, 777. added this clause. 

2 Sec. 304. Demonstration Cities and Metropolitan Development Act of 1966. Public Law 
89-T54, approved November 3, 1966, 80 Stat. 1255. 1267, added this clause. 

3 Sec. 313. Housing: and Urban Development Act of 1968, Public Law 90-448, approved 
August 1, 1968. 82 Stat. 476, 511, added the balance of this paragraph. 

* Added by sec. 208(a). Housing and Urban Development Act of 1965. Public Law 89-117. 
approved August 10. 1965, 79 Stat. 451. 468. 



218 



NATIONAL HOUSING ACT §213 

acquired by a cooperative corporation), (i), and (j). The Manage- 
ment Fund shall also be used as a revolving fund for mortgages, loans, 
and commitments transferred to it pursuant to subsection (m). The^ 
Secretary is directed to transfer to the Management Fund from the 
General Insurance Fund an amount equal to the total of the premium 
payments theretofore made with respect to the insurance of mortgages 
and loans transferred to the Management Fund pursuant to subsec- 
tion (m) minus the total of any administrative expenses theretofore 
incurred in connection with such mortgages and loans, plus such other 
amounts as the Secretary determines to be necessary and appropriate. 
General expenses of operation of the Department of Housing and Ur- 
ban Development relating to mortgages or loans which are the obliga- 
tion of the Management Fund may be charged to the Management 
Fund. 

(1)2 The Secretary shall establish in the Management Fund, as 
of the date of the enactment of this subsection, a General Surplus 
Account and a Participating Reserve Account. The aggregate net 
income thereafter received or any net loss thereafter sustained by the 
Management Fund, in any semiannual period, shall be credited or 
charged to the General Surplus Account or the Participating Reserve 
Account or both in such manner and amounts as the Secretary may 
determine to be in accord with sound actuarial and accounting 
practice. Upon termination of the insurance obligation of the Man- 
agement Fund by payment of any mortgage or loan insured under this 
section, and at such time or tim.es prior to such termination as the 
Secretary may determine, the Secretary is authorized to distribute 
to the mortgagor or borrower a share of the Participating Reserve 
Account in such manner and amount as the Secretary shall determine 
to be equitable and in accordance with sound actuarial and accounting 
practice : Provided, That in no event shall the amount of the distribut- 
able share exceed the aggregate scheduled annual preminums of the 
mortgagor or borrower to the year of payment of the share less the 
total amount of any share or shares previously distributed by the 
Secretary to the mortgagor or borrower : And provided furtlier^ That 
in no event may a distributable share be distributed until any funds 
transferred from the General Insurance Fund to the Management 
Fund pursuant to subsection (o) have been repaid in full to the 
General Insurance Fund. No mortgagor, mortgagee, borrower, or 
lender shall have any vested right in a credit balance in any such 
account or be subject to any liability arising out of the mutuality of 
the ^lanagemcnt Fund. The determination of the Secretary as to the 
amount to be paid by him to any mortgagor or borrower shall be final 
and conclusive. 

(m)^ The Secretary is authorized to transfer to the Manage- 
ment Fund commitments for insurance issued under subsection (a) 
(1), (i), and (j) prior to the date of enactment of this subsection, 

1 Re". 303(c). Demonstration Cities and ^TetropoUton Development Act of 1966, Public 
Law 89-754. approved November 3. 1966, 80 Stat. 1255, 1267, substituted this sentence 
for the foil owl n s: : "The Commissioner is directed to transfer to the Management Fund 
from the General Insurance Fund established pursuant to section 519 such amount as the 
Commissioner determines to he necessary and appropriate." 

'Added by sec. 208(a). Housing: and Urban Development Act of 1965, Public Law 
89-117. approved AujTust 10, 1965, 79 Stat 451, 468, 469. 

« Added by sec. 208fa>. Housing and Urban Development Act of 1965, Public Law 89-117, 
approved August 10, 1965, 79 Stat. 451, 468. 469. 



219 



§213 NATIONAL HOUSmG ACT 

and to transfer to the Management Fund the insurance of any mort- 
gage or loan insured prior to the date of the enactment of this subsec- 
tion under subsection (a) (1), (a) (3) (if the project is acquired by a 
cooperative corporation), (i), or (j)^: Provided^ That the insurance 
of any mortgage or loan shall not be transferred under the provisions 
of this subsection if on the date of the enactment of this subsection 
the mortgage or loan is in default and the mortgagee or lender has 
notified the Secretary in writing of its intention to file an insur- 
ance claim. Any insurance or commitment not so transferred shall 
continue to be an obligation of the General Insurance Fund. 

(n)2 Notwithstanding the limitations contained in other provisions 
of this Act, premium charges for mortgages or loans ^ the insurance of 
which is the obligation of either the Management Fund or the General 
Insurance Fund may be payable in debentures issued in connection 
with mortgages or loans transferred to the Management Fund or in 
connection with mortgages or loans insured pursuant to commitments 
transferred to the Management Fund, as provided in subsection (m) 
of this section. Premium charges on the insurance of mortgages or 
loans transferred to the Management Fund or insured pursuant to 
commitments transferred to the Management Fund may be payable in 
debentures which are the obligation of either the Management Fund 
or the General Insurance Fund. 

(o) * Notwithstanding any other provision of this Act, the Sec- 
retary is authorized to transfer funds between the Cooperative Man- 
agement Housing Insurance Fund and the General Insurance Fund in 
such amounts and at such times as he may determine, taking into con- 
sideration the requirements of each such Fund, to assist in carrying 
out effectively the insurance programs for which such Funds were 
respectively established. Moneys in the Cooperative Management 
Housing Insurance Fund not needed for current operations of the fund 
shall be deposited with the Treasurer of the United States to the credit 
of the Cooperative Management Housing Insurance Fund or invested 
in bonds or other obligations of, or in bonds or other obligations 
guaranteed as to a principal and interest by, the United States or ^ 
any agency of the United States : Provided^ That such moneys shall 
to the maximum extent feasible be invested in such bonds or other 
obligations the proceeds of which will be used to directly support the 
residential mortgage market. The Secretary may with the approval 
of the Secretary of the Treasury, purchase in the open market deben- 
tures which are the obligations of the Cooperative Management Hous- 
ing Insurance Fund. Such purchases shall be made at a f)rice which 

1 Sec. 303(a), Demonstration Cities and Metropolitan Development Act of 1966, Public 
Law 89-754, approved November 3, 19'66, 80 Stat. 1255, 1266, deleted the clause Immedi- 
ately before the proviso which read : ", but only in cases where the consent of the mort- 
gagee or lender to the transfer is obtained or a request by the mortgagee or lender for the 
transfer is received by the Commissioner within such period of time after the date of the 
enactment of this subsection as the Commissioner shall prescribe". 

a Added by sec. 208(a), Housing and Urban Development Act of 1965, Public Law 
89-117, aoproved August 10, 1965, 79 Stat. 451, 468, 469. 

3 Sec. 303(b) of the Demonstration Cities and Metropolitan Development Act of 1966, 
Public Law 89-754, approved November 3, 1966, 80 Stat. 1255, 1266, substituted "the 
insurance of which is the obligation of either the Management Fund or the General 
Insurance Fund for "insured under this section and sections 207, 231, and 232. Sec. 
303(b) also added the last sentence of this paragraph. 

*Sec. 208(a). Housing and Urban Development Act of 1965, Public Law 89-117, 
approved August 10, 1965, 79 Stat. 451, 469, added the first sentence of this subsection. 
Sec. 1722(e), Housing and Urban Development Act of 1968. Public Law 90-448, approved 
August 10, 1968, 82 Stat. 476, 610. added the balance of this subsection. 

» Sec. 117(b), Housing and Urban Development Act of 1970, Public Law 91-609, ap- 
proved December 31, 1970, 84 Stat. 1770, 1774. Inserted the remainder of this sentence. 



220 



NATIONAL HOUSING ACT §214 

will provide an investment yield of not less tlican the yield obtainable 
from other investments authorized by this subsection. Debentures so 
purchased shall be canceled and not reissued. 

Sec. 214.^ If the Secretary of Housing and Urban Development finds 
that, because of higher costs prevailing in ^ Alaska, Guam, or Hawaii, 
it is not feasible to construct dwellings or ^ mobile home courts or parks 
on property located in Alaska or in Guam or Hawaii without sacrifice 
of sound standards of construction, design or livability, within the 
limitations as to maximum or maxima mortgage amount's provided in 
this Act, the Secretary may, by regulations or otherwise, prescribe, 
with respect to dollar amount, a higher maximum or maxima for the 
principal obligation of mortgages insured under this Act covering 
property located in Alaska or in Guam or Hawaii in such amounts as 
he shall find necessary to compensate for such higher costs but not to 
exceed, in any event, the maximum or maxima otherwise applicable 
(including* increased mortgage amounts in geographical areas where 
cost levels so require) by more than one-half^ thereof. Xo mortgage 
with respect to a project or property in Alaska or in Guam or Hawaii 
shall be accepted for insurance under this Act unless the Secretary 
finds that the project or property is an acceptable risk, giving consid- 
eration to the acute housing shortage in Alaska or in Guam or Hawaii : 
Provided^ That any such m.ortgage may be insured or accepted for 
insurance without regard to any requirement in any other section of 
this Act that the Secretary finds the project or property to be economi- 
cally sound or an acceptable risk. Notwithstanding any of the provi- 
sions of this Act or any other law, the Alaska Housing Authority or 
the Government of Guam or Hawaii or any agency or instrumentality 
thereof shall be eligible as mortgagor or mortgagee, as the case may be, 
for any of the purposes of mortgage insurance under the provisions of 
this Act. Upon application by the mortgage (1)^ where the mortgagor 
is regulated or restricted pursuant to the last sentence of this section or 
(2) where the Alaska Housing Authority or the Government of Guam 
or Hawaii or any agency or instrumentality thereof is the mortgagor 
or mortgagee, for the insurance of a mortgage under any provisions of 
this Act, the Secretary is authorized to insure the mortgage (including 
advances thereon where otherwise authorized), and to make commit- 
ments for the insuring of any such mortgages prior to the date of their 
execution or disbursement thereon, under such provisions (and this 
section) without regard to any requirement that the mortgagor shall be 
the owner and occupant of the property or shall have paid a prescribed 
amount on account of such property. Without limiting the authority of 
the Secretary under any other provision of law, the Secretary is hereby 
authorized, with respect to any mortgagor in such case (except where 

1 Added bv the Alaska FTousing Act. Public Law 52. 81st Congress, approved Anril 23, 
1949. 63 Stat. 57. Made applicable to Guam bv sec. 10(a) (3), Housing Act of 1952, Public 
Law 531. 82d Congress, approved July 14, 1952, 66 Stat. 603, and to Hawaii by sec. 25(a), 
Housing Amendments of 1953, Public Law 94, 83d Congress, approved June 30, 1953. 67 
Stat. 128. 

2 Sec. 10(c), Alaska Omnibus Act, Public Law 86-70. approved June 25. 1059, 73 Stat. 
141, 142, substituted "Alaska, Guam" for "the Territory of Alaska or in Guam". 

3 Sec. 41S(a). Housing and Urban Development Act of 1969. Public Law 91-152. ap- 
proved December 24, 1969, 83 Stat. 379. 402, inserted "or mobile home courts or parks". 

« Sec. 106. Housing Act of 1959. Public Law 86-372, approved September 23, 1959, 73 
Stat, 654, 657. inserted this parenthetical phrase. 

5 Se^'. 606. Defense Housing and Community Facilities and Service Act of 1951, Public 
Law 139. 82d Congress, approved September 1, 1951, 65 Stat. 2^3, substituted "one-half" 
for "one-third". 

"Clause numbered (1) inserted bv sec. 25(c)(1). Housing Amendments of 1953, Public 
Law 04. 83d Congress, approved June 30, 1953. 67 Stat 128. 



221 



§215 NATIONAL HOUSING ACT 

the Alaska Housing Authority is the mortgagor or mortgagee) to re- 
quire the mortgagor to be regulated or restricted as to rents or sales, 
charges, 'capital structure, rate of return, and methods of operation to 
such an extent and in such manner as the Secretary determines advis- 
able to provide reasonable rentals and sales prices and a reasonable 
return on the investment.^ 

ISSUANCE OF COMMITMENTS 

Sec. 215. The Secretary is hereby authorized to process applica- 
tions and issue commitments with respect to insurance of mortgages 
under section 8 of title I, title II, title VI, title VIII, or title IX of this 
Act, even though the permanent mortgage financing may not be in- 
sured under this Act, and in the event the mortgage is not so insured 
the Secretary is authorized to charge an additional application fee 
determined by him to be reasonable. The Secretary is authorized 
to make such rules and regulations as may be necessary to carry out 
the provisions of this section. 

waiver of OCCUPANCY REQUIREMENTS FOR SERVICEIVIEN 

Sec. 216.2 The Secretary is hereby authorized to insure any mort- 
gage otherwise eligible for insurance under any of the provisions of 
this Act without regard to any requirement that the mortgagor be the 
occupant of the property at the time of insurance, where the Secretary 
is satisfied that the inability of the mortgagor to occupy the property 
is by reason of his entry on active duty in a uniformed service subse- 
quent to the filing of an application for insurance and the mortgagor 
expresses an intent to occupy the property upon his release from active 
duty. 

general mortgage insurance authorization 

Sec. 217.^ Except with respect to the insurance of a loan or mort- 
gage pursuant to section 2, section 221, section 235, section 236, title 
VIII, title X, or title XI of '.his Act (subject to any limitations there- 
under on the time of such insurance), no loan or mortgage shall be 
insured under any provision of this Act after September 30, 1979,^ 
except pursuant to a commitment to insure before that date. 

1 This sentence was added by sec. 25(c)(2), Housing Amendments of 1953, Public Law 
94, 83d Congress, approved June 30, 1953, 67 Stat. 129, 

2 Added by sec. 607, Defense Housing and Community Facilities and Services Act of 1951. 
Public Law 139. 82d Congress, approved September 1, 1951, 65 Stat. 293, and amended 
by sec. 7(a) of Public Law 91-621, approved December 31, 1970, Si Stat. 1863. 1865 to 
extend to the Commissioned officers of the National Oceanic and Atmospheric Administra- 
tion the waiver oi! occupancy requirements accorded to militarv personnel. 

3 Sec. 101(b), Housing and Urban Development Act of 1969. Publif' Law 91-152 ap- 
proved December 24, 1969. 83 Stat. 379, amended this section to include the references 
to sections 235, 236, title XI, and also to establish the termination date of October ], 1970. 
This termination date was subsequently extended as follows: (1) To November 1 1970 by 
sec. Kb) of Public Law 91-432, approved October 2, 1970. 84 Stat. 886 ; (2) to Der^mber 1, 
1970. by sec. Kb) of Public Law 91-473, approved October 21. 1970, 84 Stat. 1064 • (3) to 
January 1, 3971, by sec. 1(b) of Public Law 91-525, approved December 1. 1970 84 Stat. 
1384; (4) to October 1, 1972, by sec. 101(b). Housing and Urban Development Act of 
1070, Public Law 91-609. approved December 31, 1970, 84 Stat. 1770; (5) to June 30, 
1973. by sec. 1(b) of Public Law 92-503, approved October 18, 1972, 86 Stat. 906 ; (6) to 
October 1, 1973, by sec. Kb) of Public Law 93-85, approved August 10 1973, 87 Stat. 220 ; 
(7) to October 1, 1974, by sec. Kb) of Public Law 93-117, approved October 2 1973 87 
Stat. 421: and (8) Sec. 316(b) of Housing and Community Development Act of 1974, 
88 Stat. 633, approved August 22, 1974. substituted "June 30.'l977" for "October 1, 1974". 
Sec. 202(b). Housing and Urban Development Act of 1965. Public Law 89-117, approved 
August 10. 1965. 79 Stat. 451. 465, had amended this section to include title X; amended 
by Housing and Community Development Act of 1977. Public Law 95-128, approved 
October 12, 1977. Public Law 95-60, approved June 30. 1977, had previouslv extended the 
date from June 30, 1977 to July 31, 1977 ; Public Law 95-80, approved Apr." 30 1977 had 
further extended the date from July 31, 1977 to September 30, 1977. Section 301(b) of the 
?iiH?^^^ ^^^ Community Development Amendments of 1978, Public Law 95-557, 92 Stat. 
2080, approved October 31, 1978, further extended this date. 

222 



NATIONAL HOUSING ACT §218 

Sec. 218. Repealed.^ 
Sec. 219. Repealed-^ 

REHABILITATION AND NEIGHBORHOOD CONSERVATION HOUSING INSURANCE 

Sec. 220.^ (a) The purpose of this section is to aid in the elimina- 
tion of slums and blighted conditions and the prevention of the de- 
terioration of residential property by supplementing the insurance 
of mortgages under sections 203 and 207 of this title with a system 
of loan * and mortgage insurance designed to assist the financing re- 
quired for the rehabilitation of existing dwelling accommodations and 
the construction of new dwelling accommodations where such dwell- 
ing accommodations are located in an area referred to in paragraph 
(1) of subsection (d) of this section. 

(b) The Secretary is authorized, upon application by the mortgagee, 
to insure, as hereinafter provided, any mortgage (including advances 
during construction on mortgages covering property of the character 
described in paragraph (3) (B) of subsection (d) of this section) 
which is eligible for insurance as hereinafter provided, and, upon 
such terms and conditions as he may prescribe, to make commitments 
for the insurance of such mortgages prior to the date of their execu- 
tion or disbursement thereon. 

(c) As used in this section, the terms ''mortgage," "first mortgage," 
"mortgagee," "mortgagor," "maturity date," and "State" shall have 
the same meaning as in section 201 of this Act. 

(d) To be eligible for insurance under this section a mortgage shall 
meet the following conditions : 

(1) The mortgaged propert}^ shall — 

(A)'^ be located in (i) the area of a slum clearance and urban 
redevelopment project covered by a Federal-aid contract executed 
or a prior approval granted, purs^uant to title I of the Housing Act 
of 1949 before the effective date of the Housing Act of 1954, or 
(ii) an urban renewal area (as defined in title I of the Housing 
Act of 1949, as amended) or (iii) the area of an urban renewal 
project assisted under section 111 of the Housing Act of 1949, as 
amended, or (iv) an area in which a program of concentrated code 
enforcemont activities is being carried out pursuant to section 117 
of tlie Housing Act of 1949 : ProvidecL That, in the case of an area 
within the purview of clause (i) or (ii) of this subparagraph, a 
redevelopment plan or an urban renewal plan (as defined in title I 
of the Housing Act of 1949, as amended) , as the case may be, has 
been approved for such area by the governing body of the locality 
involved and by the Secretary of Housing and Urban Develop- 
ment and the Secretary has determined that such plan conforms 

1 Renealed bv sec. 108, Housing Act of 1939, Public Law 86-372, approved September 23, 
1959, 73 Stat. 654. &57. 

2 Repealed by sec. llOS(aa). Housinfr and Urban Development Act of 1965, Public Law 
89-117. approved August 10. 1965, 79 Stat. 451. 507. 

•■•Added by sec. 123. Hou^inof Act of 1954, Public Law 560, S3d Congress, approved 
August 2. 1954. 68 Stat. 590, 596. 

*Sec. 102(a)(2), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 
Stat. 149, 154. inserted "loan and". 

5 Amended to include areas of urban re^iewal projects In disaster areas bv see. 307('b), 
Housing Act of 1956. Public Law 1020. 84th Congress, approved August 7. 1956, 70 Stat. 
1091, 1102. and further amended bv sec. 31 1(c), Housing and Urban Development Act of 
1905. Public Law 89-117. approved August 10. 1965. 79 Stat. 451. 478. to include code 
enforcement areas, the Supplemental Housing Authorization Act of 1977. Public Law 
95-24. approved April 30, 1977, amended this Section as set forth in the text. 



223 



§220 NATIONAL HOUSING ACT 

to a general plan for the locality as a whole and that there exist 
the necessary authority and financial capacity to assure the com- 
pletion of such redevelopment or urban renewal plan : And pro- 
vided further^ That, in the case of an area within the purview 
of clause (iii) of this subparagraph, an urban renewal plan (as 
required for projects assisted under such section 111) has been 
approved for such area by such governing body and by the Secre- 
tary, and the Secretary has determined that such plan conforms 
to definite local objectives respecting appropriate land uses, im- 
proved traffic, public transportation, public utilities, recreational 
and community facilities, and other public improvements, and 
that there exist the necessary authority and financial capacity 
to assure the completion of such urban renewal plan, and 

(B) meet such standards and conditions as the Secretary shall 
prescribe to establish the acceptability of such property for mort- 
gage insurance under this section. 

(2) The mortgaged property shall be held by — 

(A) a mortgagor approved by the Secretary, and the Sec- 
retary may in his discretion require such mortgagor to be regu- 
lated or restricted as to rents or sales, charges, capital structure, 
rate of return and methods of operation, and for such purpose the 
Secretary may make such contracts with and acquire for not 
to exceed $100 stock or interest in any such mortgagor as the Sec- 
retary may deem necessary to render effective such restriction 
or regulations. Such stock or interest shall be paid for out of the 
General Insurance Fund and shall be redeemed by the mortgagor 
at par upon the termination of all obligations of the Secretary 
under the insurance ; or 

(B) by Federal or State instrumentalities, municipal corporate 
instrumentalities of one or more States, or limited dividend or re- 
development or housing corporations or other legal entities 
restricted by or under Federal or State laws or regulations of 
State banking or insurance departments as to rents, charges, 
capital structure, rate of return, or methods of operation. 

(3) The mortgage shall — 

(A) (i) involve a principal obligation (including such initial 
service charges, appraisal, inspection, and other fees as the Sec- 
retary shall approve) in an amount not to exceed $60,000 ^ in 
the case of property upon which there is located a dwelling 
designed principally for a one-family residence ; or $65,000 ^ in 
the case of a two- family residence ; or $65,000 ^ in the case of a 
three-family residence; or $75,000^ in the case of a four-family 
residence; or in the case of a dwelling designed principally for 
residential use for more than four families (but not exceeding 
such additional number of family units as the Secretary mav 
prescribe) $75,000 ^ plus not to exceed $7,700 ^ for each additional 



1 Sec. 113(d)(1), Housing and Urban Development Act of 1969, Public Law 91-152 
approved December 24, 1969. 83 Stat. 379, 384, Increased the dollar limits on one-family 
homes from "S30.000" to "$33,000", on two- and three-family homes from "$32 500" to 
"$35,750", and on four-family homes from "$37,500" to "$41,250" and also increased 
from "$7,000" to "$7,700", the limit for each additional family unit in excess of four 
located on such property. Sec. 302(b) of Housing and Community Development Act of 
1974, Public Law &3-383, approved August 22, 1974, 88 Stat. 63'3, substituted "$45,000" 
for "$33,000". "$48,750" for "$35,750". and "$56,000" for "$41^50". each place It 
appears, Housing and Community Development Act of 1977. Puhlie Law 95-128, approved 
October 12. 1977. substituted "$60,000" for "$45,000", "$65,000" for "$48,750" and 
"$75,000" for "$56,000". 



224 



NATIONAL HOUSING ACT §220 

family unit in excess of four located on such property; and not 
to exceed an amount equal to the sum of (1) 97 per centum (but, 
in any case where the dwelling is not approved for mortgage 
insurance prior to the beginning of construction, unless the con- 
struction of the dwelling was completed more than one year prior 
to the application for mortgage insurance, 90 ^ per centmn) of 
$25,000 2 of the Secretary's estimate of replacement cost of the 
property, as of the date the mortgage is accepted for insurance, 
and (2) 95 per centum of such value in excess of $25,000^: Pro- 
vided^ That in the case of properties other than new construc- 
tion, the foregoing limitations upon the amount of the mortgage 
shall be based upon the sum of the estimated cost of repair and 
rehabilitation and the Secretary's estimate of the value of the 
property before repair and rehabilitation rather than upon the 
Secretary's estimate of the replacement cost: Provided further,^ 
That if the mortgagor is a veteran and the mortgage to be insured 
under this section covers property upon which there is located a 
dwelling designed principally for a one-family residence, the 
principal obligation may be in an amount equal to the sum of (1) 
100 per centum of $25,000 ^ of the Secretary's estimate of replace- 
ment cost of the ])roperty, as of the date the mortage is accepted 
for insurance and (2) 95 per centum of such value in excess of 
$25,000 ^ As used herein, the term "veteran" means any person 
who served on active duty in the Armed Forces of the United 
States for a period of not less than ninety day (or as certified by 
the Secretary of Defense as having performed extrahazardous 
service), and who was discharged or released therefrom under 
conditions other than dishonorable; 

(ii) ^ in a case where the mortgagor is not the occupant of the 
Droperty and intends to hold the property for rental purposes, 
have a principal obligation in an amount not to exceed 93 per 
centum of the amount computed under the provisions of clause 

(i); _ _ 



1 Sec 109(n)f2), Honslnp ,\q\ of 1959, Public Law 86-372, approved September 23, 
19nO 73 Stat. 6ri4, 657. snb5?titutetl "90 per centum" for "85 per centum". 

Sec 609 (n) (1), (2), and f3), Housinfr Act of 1901. Public Law 87-70, approved 
June >.0 1961. 75 Stat. 149. 179. ISO. substituted ".S15.000" for "$1.-^.500" and 7-", per 
centum" for "70 per centum." Sec. a05(a). Demonstration Cities and Metropolitan Devel- 
opment Act of 1966. Public Law 89-754. approved November 3. 19G6, 80 Stat. 1255, 1267, 
substituted "80 per centum" for ••7o per centum". . ^ ^ ^o-r^ t^ uh t 

* Sec 310(b)(1) of Housinpr and Communltv Development Act of 1974, Public Law 
93-383", approved August 22, 1974, 88 Stat. 633, si bstituted "$25,000" for "$15,000" in 
eacb clause numbered (1). _ . ^ , ^r.-. -^ ..,. t 

Sec 310(b)(1) of Hou.sinp and Community Development Act of 19/4, Public Law 
93-383. approved Augrst 22. 1974, 88 Stat. 633, substituted "$25,000" and "$35,000" for 
"$15.0{)0" and "$25,000" in clauses numbered 2. 

Sec 310(b)(3) of Housing and Community Development Act of 19<4, Public Law 
93-383, approved Augurt 22, 1974. 88 Stat. 633. substituted "$35,000" for "S25.000 ' in 
each clause numbered 3. Housing and Community Development Act of 1977, Public Law 
95-128. approved October 12. 1977. further amended this section as set forth m the text. 

simmediatelv prior to amendment by sec. 102(a) (1), Housing Act of 1961, Public Law 
87-70, approved June 30. 1961, 75 Stat. 149, 154, the limitations under this proviso were 
based upon "appraised value". ^ , ^ . a. ^ ^^..^ t. v.t„ 

*Sec. 305(b), Demonstration Cities and Metropolitan Development Act of 1966, Public 
Law 89-7'54. approved November 3. I960. 80 Stat. 1255, 1267, added this Pfovjso. 

5 Sec. 102(b), Housing and Urban Development Act of 1969, Public Law 91-152 ap- 
proved December 24. 1969. 83 Stat. 379. 380. substituted "$25,000" for "$20 000 Sec 
310(b) ri) of Housing and Community Development Act of 1974, Public Law 93-383. b» 
Stat. 6.33, approved August 22. 1974, substituted "$25,000" for "$15,000" in each clause 
numbered 1. Housing and Communitv Development Act of 1977 Public Law 95-128, 
approved October 12. 1977, further amended this section as set forth in the text. 

8 Sec. 209, Housing and Urban Development Act of 1965, Public Law 89-117, approved 
August 10, 1965. 79 Stat. 451, 469. amended these provisions to increase the maximum 
amount of a mortgage that can be insured in a case where the mortgagor Is not the occu- 
pant of the proper^ but intends to hold it for rental purposes. 



225 



§220 NATIONAL HOUSING ACT 

(iii) in a case where the mortgagor is not the occupant of the 
property and intends to hold the property for the purpose of sale, 
have a principal obligation in an amount not to exceed 85 per 
centum of the amount computed under the provisions of clause (i) , 
or in the alternative, in an amount equal to the amount computed 
under the provisions of clause (i) if the mortgagor and mortgagee 
assume responsibility in a manner satisfactory to the Secretary 
for the reduction of the mortgage by an amount not less than 
15 per centum of the outstanding principal amount thereof, or 
by such greater amount as may be required to meet the limita- 
tions of clause (i), in the CA^ent the mortgaged property is not, 
prior to the due date of the eighteenth amortization payment of 
the mortgage, sold to a purchaser acceptable to the Secretary 
who is the occupant of the property and who assumes and agrees 
to pay the mortgage indebtedness ; and 

(iv) in no case involving refinancing (except as provided in 
clause (iii)) have a principal obligation in an amount exceeding 
the sum of the estimated cost of repair and rehabilitation and the 
amount (as determined by the Secretary) required to refinance 
existing indebtedness secured by the property or project, plus 
any existing indebtedness incurred in connection with improving, 
repairing, or rehabilitating the property ; or 
(B)(i)^ 

(ii) not exceed 90 per centum of the amount which the Secre- 
tary estimates will be the replacement cost of the property or project 
when the proposed improvements are completed (the replacement 
cost 2 of the property or project may include the land, the proposed 
physical improvements, utilities within the boundaries of the prop- 
erty or project, architect's fees, taxes, and interest during construc- 
tion, and other miscellaneous charges incident to construction and 
approved by the Secretary, and shall include an allowance ^ for 
builder's and sponsors profit and risk of 10 per centum of all of the 
foregoing items except the land unless the Secretary, after certification 
that such allowance is unreasonable, shall by regulation prescribe a 
lesser percentage) : Provided.^ That in the case of properties other 
than new construction, the foregoing limitations upon the amount of 
the mortgage shall be based upon the sum of the estimated cost of 
repair and rehabilitation and the Secretary's estimate of the value 
of the property before repair and rehabilitation rather than unon 
the Secretary's estimate of the replacement cost: Provided furtJier, 
That in no case involving refinancing shall such mortgage exceed such 



1 Spo. 304(d) of Housing and Community Development Act of 1974. Public Law 98-383, 
R8 Stnt. 633, approved August 22, 1974, struck clause (i) in section 220(d)(3)(B) of 
tbe National Housing Act, but did not renumber the following paragraphs. 

2 Sec. 102(g). Housing Amendments of 19."),5. Public Law 345, S4th Congress, approved 
August 11, 1055, f)9 Stat. 635, 636, substituted "replacement cost" for "value" where 
mortgages finance new construction. 

■'Prov'Nion for allowance for i)uildor's an^l sponsor's profit and risk Inserted by soc. 
107fa). TTousing Act of 1956, Public Law 1020, 84th Congress, approved August 7, "1956, 
70 Stat. 1091, 1094. 

*Sec. 102(a)(1), Housing Act of 1961, Public Law 87-70. approved June 30, 1961, 75 
Stat. 1 i9, 154, substituted the next two provisos for the following: "Provided, That In 
the c.i'^e of properties other than new construction, the foreroing limitation upon the 
amount of the mortgage shall he based upon appraised value rather than upon the Com- 
missioner's estimate of the replacement cost." 



226 



NATIONAL HOUSING ACT §220 

estimated cost of repair and rehabilitation and the amount (as deter- 
mined by the Secretary) required to refinance existing indebtedness 
secured by the property or project : Provided further ^^ That the mort- 
gage may involve the financing of the purchase of property which has 
been rehabilitated by a local public agency with Federal assistance 
pursuant to section 110(c)(8) of the Housing Act of 1949, and, in 
such case the foregoing limitations upon the amount of the mortgage 
shall be based upon the appraised value of the property as of the date 
the mortgage is accepted for insurance : 

(iii)2 not exceed, for such part of the property or project as 
may be attributable to dwelling use (excluding exterior land im- 
provements as defined by the Secretary), $19,500' per family unit 
without a bedroom, $21,600 ^ per family unit with one bedroom, 
$25,800 3 per family unit with two bedrooms. $31,800 ^ per family unit 
with three bedrooms, and $36,000 ^ per family imit with four or more 
bedrooms, except that as to projects to consist of elevator-type struc- 
tures tlie Secretary may, in his discretion, increase the dollar amount 
limitations per family unit to not exceed $22,500 ^ per family unit with- 
out a bedroom, $25,200 * per family unit with one bedroom, $30,900 * 
per family unit with two bedrooms, $38,700 * per family unit with three 
bedrooms and $43,758 * per family unit with four or more bedrooms, 
as ih^ case may be, to compensate for the higher costs incident to the 
construction of elevator-type structures of sound standards of con- 
struction and design ; and except that with ^ respect to rehabilitation 
projects involving not more than five family units, the Secretary may 
by regulation increase by 25 per centum any of the foregoing dollar 
amount limitations contained in this clause which are applicable to 
units with two, three, or four or more bedrooms: Provided^ That the 
Secretary may, by regulation, increase any of the foregoing dollar 
amomit limitations contained in this clause ® (as determined after the 
application of {'.-r^. preceding proviso) by not to exceed 50 per centum 

1 Sec. 311(a), Housing find Urbnn Development Act of 1968, Public Law 90-448, 
approved An;?ust 1. 1968, 82 Stnt. 476, 510. ndded this proviso. 

2 Sec. 107(c). Housing Act of 1064, Public Law 88-560. approved September 2, 1964. 
78 Stat. 769, 775. deleted the previous per room limits In this par. (3)(B)(iiI) on the 
amount of a mortgage and Rubstltnte<l dollar amount limitations based on the number 
of family units in the project with the dollar amount limitations varying according to the 
number of bedrooms in each unit. 

Sec. 113(d), Housing and Urban Development Act of 1969, Public Law 91-152, ap- 
proved December 24, 1969. 83 .Stat. 379, 384, Increased by ten percent as shown In the 
text the dollar limits in this par. 3(B) (ill). 

3 Sec. 303(c)(1) of Housing and roinmunitv Development Act of 1974. Public Law 93- 
383. 88 Stat. 633, approved August 22. 1974. .siibstituted "$13,000" for "$9,900", "$18,000" 
for "$13,750". ".?21.500" for "$16,500". "$26,500" for "$20,350", and "$30,000" for 
"$23,100". Sec. 8(b)(3)(A) of the Housing Authorization Act of 1976, Public Law 
94-375. approved August 3. 1976. 90 Stat. 1067, amended section 220(d) (3) (B) (11) of 
the National Housing Act bv substituting "$19,500" for "$13,000", "$21,600" for 
"$18,000", "$25,800" for "$21,500", "$31,800" for "$26,500", and "$36,000" for 
"$30,000". 

* Sec. 303(c)(2) of Housing and Community Development Act of 1974, Public Law 
93-383. 88 Stat. 633. approved August 22. 1974. substituted "$15,000" for "$11,550", 
"$21,000" for "$16,500". "$25,750" for "$19,800". "$32,250" for "$24,7,^0", and "$36,465" 
.PJ^a^'^^'^^^"' S^^- 8(b)(3)(B) of such Act further amended this section bv substituting 
"$22,500" for "$15,000", "$25,200" for "$21,000", "$30,900" for "$25,750", "$38,700" 
for "$32,250", and "$43,758" for "$36,465". 

'^This clause down to and including the first proviso added bv sec. 306(a), Demonstration 
Cities and Metropolitan Development Act nf 1966. Public Law 89-754, approved Novem- 
ber 3, 1966, 80 Stat. 1255, 1207. 

« Sec. 300(b), Demonstration Cities and Metropolitan Development Act of 196G, Public 
Law 89-754, approved November 3. 1966, 80 Stat. 1255, 1268, Inserted this parenthetical 
pHrase and added "further" after the proviso that follows. 



227 



§220 NATIONAL HOUSING ACT 

in any geographical area ^ where he finds that cost levels so require : 
Provided further, That nothing contained in this subparagraph shall 
preclude the insurance of mortgages covering existing multifamily 
dwellings to be rehabilitated or reconstructed for the purposes set 
forth in subsection (a) of this section; and 

(iv) 2 include such nondwelling facilities as the Secretary deems 
desirable and consistent with the urban renewal plan : Provided, That 
the project shall be predominantly residential and any nondwellmg 
facility included in the mortgage shall be found by the Secretary to 
contribute to the economic feasibility of the project, and the Secretary 
shall give due consideration to the possible effect of the project on other 
business enterprises in the community. 

(4) The mortgage shall provide for complete amortization by peri- 
odic payments within such terms as the Secretary may prescribe, but 
as to mortgages coming within the provisions of paragraph (3) (A) 
of this subsection (d) not to exceed the maximum maturity prescribed 
by the provisions of section 203 (b) (3) . The mortgage shall bear inter- 
est (exclusive of premium charges for insurance and service charge, 
if any) at not to exceed 5 per centum per annum on the amount of the 
principal obligation outstanding at any time, or not to exceed such per 
centum per annum not in excess of 6 per centum as the Secretary finds 
necessary to meet the mortgage market; contain such terms and provi- 
sions with respect to the application of the mortgagor's periodic pay- 
ment to amortization of the principal of the mortgage, insurance, 
repairs, alterations, payment of taxes, default reserves, delinquency 
charges, foreclosure proceedings, anticipation of maturity, additional 
and secondary liens, and other matters as the Secretary may in his 
discretion prescribe. 

(e) The Secretary may at any time, under such terms and conditions 
as he may prescribe, consent to the release of the mortgagor from his 
liability under the mortgage or the credit instrument secured thereby, 
or consent to the release of parts of the mortgaged property from the 
lien of the mortgage. 

(f) The mortgagee shall be entitled to receive the benefits of the 
insurance as hereinafter provided — 

(1) as to mortgages meeting the requirements of paragraph (3) 
(A) of subsection (d) of this section, as provided in section 204 
(a) of this Act with respect to mortgages insured under section 
203; and the provisions of subsections (b), (c), (d), (e), (f), (g), 
(h), (i), and (k) ^ of section 204 of this Act shall be applicable 
to such mortgages insured under this section, except that all ref- 
erences therein to the Mutual Mortgage Insurance Fund or the 
Fund shall be construed to refer to the General Insurance Fund 



1 Sec. 3 of Public Law 94-173, 89 Stat. 1027, approved December 23, 1975. amended 
sec. 220(d) (3) (B) (ill) of the National Housing Act by deleting the words, "by not to 
exceed 45 per centum in any geographical area" and inserting the words "by not to exceed 
75 per centum in any geographical area". Sec. 8(a) of the Housing Authorization Act of 
1976, Public Law 94-375, approved August 3, 1976, 90 Stat. 1067, amended section 
220(d) (3) (B)(iii) of the National Housing Act by striking "by not to exceed 75 per 
centum in any geographical area" and inserted in lieu thereof "by not to exceed 50 per 
centum in any geographical area". 

2 Immediately prior to amendment by sec. 210. Housing and Urban Development Act 
of 1965. Public Law 89-13 7, approved August 10, 1965, 79 Stat. 4'51, 470, clause (Iv) read 
as follows : 

"(Iv) Include such nondwelling facilities as the Commissioner deems adequate to serve 
the needs of the occupants of the property and of other housing In the neighborhood." 

8 Sec. 116(b). Housing Act of 1959, Public Law 86-372, approved September 23, 1959, 
73 Stat. 654. 664, added "k'\ 



228 



NATIONAL HOUSING ACT §220 

and all references therein to section 203 shall be construed to refer 
to this section ; 

(2) as to mortgages meeting the requirements of paragraph (3) 
(B) of subsection (d) of this section, as provided in section 207 (g) 
of this Act with respect to mortgages insured under said section 
207, and the provisions of subsections (h), (i), (j), (k), and (1) 
of section 207 of this Act shall be applicable to such mortgages 
insured under this section, and all references therein to the Hous- 
ing Insurance Fund or the Housing Fund shall be construed to 
refer to the General Insurance Fund; or 

(3) ^ as to mortgages meeting the requirements of this section 
that are insured or initially endorsed for insurance on or after 
tlie date of enactment of the Housing Act of 1961, notwithstanding 
the provisions of paragraphs (1) and (2) of this subsection, the 
Secretary in his discretion, in accordance with such regulations 
as he may prescribe, may make payments pursuant to such para- 
graphs in cash or in debentures (as provided in the mortgage 
insurance contract), or may acquire a mortgage loan that is in 
default and the security therefor upon payment to the mortgagee 
in cash or in debentures (as provided in the mortgage insurance 
contract) of a total amount equal to the unpaid principal balance 
of the loan plus any accrued interest and any advances approved 
by the Secretary and made previously by the mortgagee under the 
provisions of the mortgage. After the acquisition of the mortgage 
by the Secretary the mortgagee shall have no further rights, lia- 
bilities, or obligations with respect to the loan or the security for 
the loan. The appropriate provisions of sections 204 and 207 relat- 
ing to the rights, liabilities, and obligations of a mortgagee shall 
apply with respect to the Secretary when he has acquired an in- 
sured mortgage under this paragraph, in accordance with and 
subject to regulations (modifying such provisions to the extent 
necessary to render their application for such purposes appro- 
priate and effective) which shall be prescribed by the Secretary, 
except that as applied to mortgages so acquired (A) all references 
in section 204 to the Mutual^ Mortgage Insurance Fund or the 
Fund shall be construed to refer to the General Insurance Fund, 
and (B) all references in section 204 to section 203 shall be con- 
strued to refer to this section. If ^ the insurance payment is made 
in cash, there shall be added to such payment an amount equiva- 
lent to the interest which the debentures would have earned, com- 
puted to a date to be established pursuant to regulations issued by 
the Secretary. 

(h)* (1) To assist further in the conservation, improvement, repair, 
and rehabilitation of property located in the area of an urban re- 

1 Spo. 61 2 (>;'). Houslnj: Act of 1961, Public Law 87-70. approved June 30, 1961, 75 Stat. 
149, IRl, added this paragraph. _ ,, «r. .-«« 

2 This ppntenre ad/^led bv sec. 105(cUl). Housing Act of 1964, Public Law 88-560, 
approved September 2 1964. 78 Stat. 769, 772. ^ , . * ^ i, ,Aor 

' Snbsec. (s) deleted by sec. 1108(h). Housing and Urban Development Act of 1965, 
Public Law 89-117, approved ATigust 10. 196.'). 79 Stat. 4.51. 505. 

« Sec. in2(a)f.S), Housing Act of 1961, Public Law 87-70, approved June 30. 1961. 
75 Stat. 149, 154. added subsec. (h) but sec. 311(d), Housing and Urban Development 
Act of 1965, Public Law 89-117. approved August 10, 1965. 79 Stat 451, 478, amended 
the first sentence of subsec. (h) to malce FHA sec. 220 home Improvement loans that are 
insured for urban renewal areas also available for code enforcement areas. Sec. 11^ (a >, 
Housing Act of 1964, Public Law 88-560, approved September 2, 1964. 78 Stat 7G9. 777, 
778. amended the second sentence of subsec. (h) to provide for insurance of loans made to 
«nable the borrower to pay assessments against his property. 

229 



§220 NATIONAL HOUSING ACT 

newal project, or in an area in which a program of concentrated code 
enforcement activities is being carried out pursuant to section 117 of 
the Housing Act of 1949, as provided in paragraph (1) of subsection 
(d) of this section, the Secretary is authorized upon such terms 
and conditions as he may prescribe to make commitments to insure 
and to insure home improvement loans (including advances during 
construction or improvement) made by financial institutions on and 
after the date of enactment of the Housing Act of 1961.^ As used in 
this subsection — 

(A) the term "home improvement loan" means a loan, advance 
of credit, or purchase of an obligation representing a loan or 
advance of credit made — 

(i) for the purpose of financing the improvement of an 
existing structure (or in connection with an existing struc- 
ture) which was constructed not less than ten years prior to 
the making of such loan, advance of credit, or purchase, and 
which is used or will be used primarily for residential pur- 
poses : Provided^ That a home improvement loan shall include 
a loan, advance, or purchase with respect to the improvement 
of a structure which was constructed less than ten years prior 
to the making of such loan, advance, or purchase if the pro- 
ceeds are or will be used primarily for major structural im- 
provements, or to correct defects which were not known at 
the time of the completion of the structure or which were 
caused by fire, flood, windstorm, or other casualty ; or 

(ii) for the purpose of enabling the borrower to pav that 
part of the cost of the construction or installation of side- 
walks, curbs, gutters, street paving, street lights, sewers, or 
other public improvements, adjacent to or in the vicinity of 
property owned by him and used primarily for residential 
purposes, which is assessed against him or for which he is 
otherwise legally liable as the owner of such property ; 
CB) the term "improvement" means conservation, repair, resto- 
ration, rehabilitation, conversion, alteration, enlargement, or re- 
modeling; and 

(C) the term "financial institution" means a lender approved 
by the Secretary as eligible for insurance under section 2 or a mort- 
gagee approved under section 203(b) (1). 
(2) To be eligible for insurance under this subsection, a home im- 
provement loan shall — 

(i) not exceed the Secretary's estimate of the cost of improve- 
ment, or $12,000 2 per family unit, whichever is the lesser, and be 
limited as required by parasrraph (11) : Provided} That the Secre- 
tary may, by regulation, increase such amount by not to exceed 
45 per centum in any geographical area where he finds that cost 
levels so require ; 

(ii) be limited to an amount which when added to any outstand- 
ing indebtedness related to the property (as determined by the 
Secretary) creates a total outstanding indebtedness which does not 



1 June 30. 1961. 

2 Sec. 113(d)(4), Houslnsr and Urban Development Act of 1969. Public Law 91-152, 
approved December 24, 1969, 83 Stat. 379. 384, substituted "$12,000" for ".SIO.OOO". 

3 This proviso added by sec. 211(a), Housing and Urban Development Act of 1965, 
Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 470. 



230 



NATIONAL HOUSING ACT §220 

exceed the limits provided in subsection (d) (3) for properties (of 
the same type) other than new construction ; 

(iii) bear interest at not to exceed a rate prescribed by the Secre- 
tary, but not in excess of 6 per centum per annum of the amount of 
the principal obligation outstanding at any time, and such other 
charges (including such service charges, appraisal, inspection, and 
other fees) as may be approved by the Secretary ; 

(iv) have a maturity satisfactory to the Secretary, but not to 
exceed twenty years from the beginning of amortization of the 
loan or three-quarters of the remaining economic life of the struc- 
ture, whichever is the lesser ; 

(v) comply with such other terms, conditions, and restrictions 
as the Secretary may prescribe ; and 

(vi) represent the obligation of a borrower who is the owner of 
the property improved, or a lessee of the property under a lease for 
not less than 99 years which is renewable or under a lease having 
an ^ expiration date in excess of 10 years later than the maturity 
date of the loan. 
(3) Any home improvement loan insured under this subsection may 
be refinanced and extended in accordance with such terms and condi- 
tions as the Secretary may prescribe, but in no event for an additional 
amount or term in excess of the maximum provided for in this sub- 
section. 
(4)^ 

(5) The Secretary is authorized to fix a premium charge for the 
insurance of home improvement loans under this subsection but in 
the case of any such loan such charge shall not be less than an amount 
equivalent to one-half of 1 per centum per annum nor more than an 
amount equivalent to 1 per centum per annum of the amount of the 
principal obligation of the loan outstanding at any time, without tak- 
ing into account delinquent payments or prepayments. Such premium 
charores shall be payable by the financial institution either in cash or 
in debentures (at par plus accrued interest) issued by the Secretary 
as obligations of the General Insurance Fund, in such manner as 
may be prescribed by the Secretary, and the Secretary may require 
the pavment of one or more such premium charges at the time the 
loan is insured, at such discount rate as he may prescribe not in excess 
of the interest rate specified in the loan. If the Secretary finds upon 
presentation of a loan for insurance and the tender of the initial 
premium charge or charges so required that the loan complies with 
the provisions of this subsection, such loan may be accepted for in- 
surance by endorsement or otherwise as the Secretary may prescribe. 
In the event the principal obligation of any loan accepted for insurance 
under this subsection is paid in full prior to the maturity date, the 
Secretary is authorized to refund to the financial institution for the 
account of the borrower all, or such portions as he shall determine to be 
equitable, of the current unearned premium charges theretofore paid. 

(6) In cases of defaults on loans insured under this subsection, 
upon receiving notice of default, the Secretary, in accordance with 
such regulations as he may prescribe, may acquire the loan and any 

o/ ^^^n}^^- Housing Act of 1964, Public Law 88-560. approved September 2, 1964, 78 
htat. <G9. (78, substituted "an expiration date In excess of 10 vears later than the maturity 
I^T^*^t *^® loan" for "a period of not less than 50 years to run from the date of the loan." 
oo P,- ^^ ^y ^^^- 1108(h). Housing and Urban Development Act of 1965. Public Law 
89-117, approved August 10, 1965, 79 Stat 451, 505. 

231 



§220 NATIONAL HOUSING ACT 

security therefor upon payment to the financial institution in cash 
or in debentures (as provided in the loan insurance contract) ot a total 
amount equal to the unpaid principal balance of the loan, plus any ac- 
crued interest, any advances approved by the Secretary made pre- 
viously by the financial institution under the provisions of the loan 
instruments, and reimbursement for such collection costs, court costs, 
and attorney fees as may be approved by the Secretary. If ^ the 
insurance payment is made in cash, there shall be added to such pay- 
ment an amount equivalent to the interest which the debentures would 
have earned, computed to a date to be established pursuant to regu- 
lations issued by the Secretary. ^ , i, , ^ -, . 

(7) Debentures issued under this subsection shall be executed m 
the name of the General Insurance Fund as obligor, shall be signed 
Ly the Secretary, by either his written or engraved signature, shall 
he negotiable, and shall be dated as of the date the loan is assigned 
to the Secretary and shall bear interest from that date. They shall 
hear interest at a rate, established by the Secretary pursuant to section 
^24, payable semiannually on the 1st day of January and the 1st day of 
July of each year, and shall mature ten years after their date of issu- 
ance. They shall be exempt from taxation as provided in section 207 (i) 
with respect to debentures issued under that section. They shall be paid 
out of the General Insurance Fund which shall be primarily liable 
therefor and they shall be fully and unconditionally guaranteed as to 
principal and interest by the United States, and the guaranty shall be 
expressed on the face of the debentures. In the event the General Insur- 
ance Fund fails to pay upon demand, when due, the principal of or 
interest on any debentures so guaranteed, the Secretary of the Treas- 
ury shall pay to the holders the amount thereof which is hereby au- 
thorized to be appropriated, out of any money in the Treasury not 
otherwise appropriated, and thereupon, to the extent of the amount so 
paid, the Secretary of the Treasury shall succeed to all the rights of the 
holders of such debentures. Debentures issued under this subsection 
shall be in such form and denominations in multiples of $50, shall be 
subject to such terms and conditions, and shall include such provisions 
for redemption, if any, as may be prescribed by the Secretary with the 
approval of the Secretary of the Treasury, and they may be in coupon 
or registered form. Any difference between the amount of the deben- 
tures to which the financial institution is entitled, and the aggregate 
face value of the debentures issued, not to exceed $50, shall be adjusted 
by the payment of cash by the Secretary to the financial institution 
from the General Insurance Fund. 

(8) The provisions of subsections (c), (d), and (h) of section 2 
shall apply to home improvement loans insured under this subsection, 
and for the purposes of this subsection references in subsections (c), 
(d), and (h) of section 2 to "this section" or "this title" shall be con- 
strued to refer to this subsection. 

(9) (A) Notwithstanding any other provisions of this Act, no home 
improvement loan executed in connection with the improvement of a 

iThls sentence added by sec. 105(c)(1), Housing Act of 1964, Public Law 88-560, ap- 
proved September 2, 1964, 78 Stat. 769,772. 



232 



NATIONAL HOUSING ACT §220 

structure for use as rental accommodations for five or more families 
shall be insured under this subsection unless the borrower has agreed 
(i) to certify, upon completion of the improvement and prior to final 
endorsement of the loan, either that the actual cost of improvement 
equaled or exceeded the proceeds of the home improvement loan, or 
the amount by which the proceeds of the loan exceed the actual cost, as 
the case may be, and (ii) to pay forthwith to the financial institution, 
for application to the reduction of the principal of the loan, the 
amount, if any, certified to be in excess of the actual cost of improve- 
ment. Upon the Secretary's approval of the borrower's certification 
as required under this paragraph, the certification shall be final and 
incontestable, except for fraud or material misrepresentation on the 
part of the borrower. 

(B) As used in subparagraph ( A) , the term "actual cost" means the 
cost to the borrower of the improvement, including the amounts paid 
for labor, materials, construction contracts, off-site public utilities,^ 
streets, organization and legal expenses, such allocations of general 
overhead items as are acceptable to the Secretary, and other items 
of expense approved by the Secretary, plus a reasonable allowance 
for builder's profit if the borrower is also the builder, as defined by the 
Secretary, and excluding the amount of any kickbacks, rebates, or 
trade discounts received in connection with the improvement. 

(10) Notwithstanding any other provision of this Act, the Secre- 
tary is authorized and empowered (i) to make expenditures and 
advances out of funds made available by this Act to preserve and pro- 
tect his interest in any security for, or the lien or priority of the lien 
securing, any loan or other indebtedness owing to, insured by, or 
acquired by the Secretary or by the United States under this sub- 
section, or "section 2 or 203 (k) ; and (ii) to bid for and to purchase at 
any foreclosure or other sale or otherwise acquire property pledged, 
mortgaged, conveyed, attached, or levied upon to secure the payment 
of any loan or other indebtedness owing to or acquired by the Secre- 
tary or by the United States under this subsection or section 2 or 
203 (k). Tlie authority conferred by this paragraph may be exercised 
as provided in the last sentence of section 201(g). 

(11) Notwithstanding any other provision of this Act, no home im- 
provement loan made in whole or in part for the purpose specified in 
clause (A) (ii) of the second sentence of paragraph (1) shall be in- 
sured under this subsection if such loan (or the portion thereof which 
is attributable to such purpose), when added to the aggregate princi- 
pal balance of any outstanding loans insured under this subsection or 
section 203 (k) which were made to the same borrower for the purpose 
so specified (or the portion of such aggregate balance which is at- 
tributable to such purpose) , would exceed $10,000 or^ such additional 
amount as the Secretary has by regulation prescribed in any geo- 
graphical area where he finds cost levels so required pursuant to the 
authority vested in him by the proviso in paragraph (2) (i) of this 
subsection. 



»Sec. 211(b), Housing and Urban Development Act of 19C5, Public Law 89-117, 
approved August 10, 1965, 79 Stat. 451, 470, added the remainder of this paragraph. 



45-704 0-79-16 233 



§221 NATIONAL HOUSING ACT 

HOUSING FOR MODERATE INCOME AND DISPLACED FAMILIES ^ 

Sec. 221. (a) This section is designed to assist private industry ^ in 
providing housing for low and moderate income families and dis- 
placed families.^ 

(b) The Secretary is authorized, upon application by the mort- 
gagee, to insure under this section as hereinafter provided any mort- 
gage (including* advances during construction on mortgages cover- 
ing property of the character described in paragraphs (3) and (4) of 
subsection (d) of this section) which is eligible for insurance as pro- 
vided herein and, upon such terms and conditions as the Secretary 
may prescribe, to make commitments for the insurance of such mort- 
gages prior to the date of their execution or disbursement thereon. 

(c) As used in this section, the terms "mortgage", "first mortgage", 
"mortgagee", "mortgagor", "maturity date" and "State" shall have 
the same meaning as in section 201 of this Act. 

(d) To be eligible for insurance under this section, a mortgage 
shall — 

(1) have been made to and be held by a mortgagee approved by 
the Secretary as responsible and able to service the mortgage 
properly ; 

(2) be secured by property upon which there is located a dwell- 
ing conforming to applicable standards prescribed by the Secre- 
tary under subsection (f ) of this section, and meeting the require- 
ments of all State laws, or local ordinances or regulations 
relating to the public health or safety, zoning, or otherwise, which 
may be applicable thereto, and shall involve a principal obligation 
(including such initial service charges, appraisal, inspection, and 
other fees as the Secretary shall approve) in an amount (A) 
not to exceed (i) $31,000 ^ (or $36,000,^ if the mortgagor's family 
includes five or more persons) in the case of a property upon 
which there is located a dwelling designed principally for a single- 
family residence, (ii) $35,000 ^ in the case of a property upon 
which there is located a dwelling designed principally for a two- 
family residence, (iii) $48,600^ in the case of a property upon 
which there is located a dwelling designed principally for a three- 
family residence, or (iv) $59,400 ^ in the case of a property upon 
which there is located a dwelling designed principally for a four- 

iSec. 101(a). Housing Act of 1961, Public Law 87-70, approved June 30. 1961, 75 Stat. 
149, inserted tliis section heading, and amended tlie sec. 221 mortgage insurance program 
for displaced families to provide more liberal terms and to broaden the program to apply to 
low- and moderate-income families generally. 

2 See sec. 207. Appalachian Regional Development Act of 1965, which authorizes 
loans and grants for planning and nreliminary expenses of sec. 221 housing for low- and 
modernte-income families and individuals. 

3 Sec. 4(a). Disaster Relief Act of 1966, Public Law 89-769, approved November 6, 1966. 
SO S<^a^. 1816, 1317, substituted "displaced families" for "families displaced from urban 
renewil arpas or as a result of governmental notion". 

* Sec. 101(a)(3). Housing Act of 1961. Public Law 87-70, approved June 30, 1961, 75 
Stat. 149. inserted this parenthetical phrase. 

5 Sec. 113(e). Housing and Urban Development Act of 1969. Public Law 91-152, ap- 
proved December 24. 1909. S3 Stat. 379. 384. increased the dollar limits on one-family 
homes from "$15,000" to "$18,000" (or "$17,500" to "$21,000" if the morteaenrs family 
includes five or more persons), on two-family homes from "S20,000" to "S24.000". three- 
family homes from "$27,000" to "$32,400". and on four-familv homes from "$33,000" to 
"$39.nO0". Sec. 302(c) (1) of Housing and Communitv Development Act of 1974. Public Law 
93-383. 88 Stat. 633, approved August 22. 1974. substituted ".'^21.600" for "$18,000" "$25,- 
200" for "$21,000", "$28,000" for "$24,000". "$38,880" for "$32,400". and "$47,520" ^or 
"$39,600". Sec. 3(d)(1) of the Housing Authorization Act of 1976. Public Law 94-375. 
approved August 3. 1976. 90 Stat. 1067. amended section 221(d)(2)(A) of the National 
Housing Act by striking "$21,600" and "$25,200" and inserting in lieu thereof "$25,000" 
and "$29,000". respectively , dollar limits amended bv Housing and Communitv Develop- 
ment Act of 1977, Public Law 95-128, approved October 12, 1977, as set forth in the text. 



234 



NATIONAL HOUSING ACT §221 

family residence : Provided^ That a mortgage secured by property 
upon which there is located a dwelling designed principally for a 
two-, three-, or four-family residence shall not be insured under 
this section except in the case of a dwelling for occupancy by the 
mortgagor ^ Provided further^ That the Secretary may increase 
the foregoing amounts to not to exceed $36,000 ^ (or $42,000 ^ if 
the mortgagor's family includes tive or more persons), $45,000,^ 
$57,600,^ and $68,400,^ respectively, in any geographical area 
where he finds that cost levels so require ; and (B) not to exceed the 
appraised value of the property (as of the date the mortgage is 
accepted for insurance) : Provided^ That (i) if the mortgagor is 
the owner and an occupant of the property at the time of insur- 
ance, (1) in the case of a displaced family, he shall have paid on 
account of the property at least $200 in the case of a single-family 
dwelling, $400 in the case of a two-family dwelling, $600 in the 
case of a three-family dwelling, and $800 in the case of a four- 
family dwelling, or (2) in the case of any other family, he shall 
have paid on account of the property at least 3 per centum of the 
Secretary's estimate of its acquisition cost, in cash or its equiv- 
alent ; * which amount in either instance may include amounts to 
cover settlement costs and initial payments for taxes, hazard insur- 
ance, mortgage insurance premium, and other prepaid expenses; 
or, (ii) in the case of repair and rehabilitation, the amount of the 
mortgage shall not exceed the sum of the estimated cost of re- 
pair and rehabilitation and the Secretary's estimate of the value 
of the property before repair and rehabilitation, except that in no 
case involving refinancing shall such mortgage exceed such esti- 
mated cost of repair and rehabilitiition and the aiaount (as de- 
termined by the Secretary) required to refinance existing in- 
debtedness secured by the property: Provided further^ That 
nothing contained herein shall preclude the Secretary from issuing 
a commitment to insure, and insuring a mortgage pursuant 
thereto, where the mortgagor is not the owner and an occupant of 
the property, if the property is to be built or acquired and repaired 
or rehabilitated for sale, and the insured mortgage financing is re- 
quired to facilitate the construction, or the repair or rehabilita- 
tion, of the dwelling and to provide financing pending the sub- 
sequent sale thereof to a qualified owner who is also an occupant 
thereof, but in such instances the mortgage shall not exceed 85 per 



1 Sec. 305, Housing and Urban Development Act of 1968, Public Law 90-448, approved 
August 1. 1908. 82 Stat. 476. 508. sufsiitnted "the mortgagor" for "a displaced family". 

2 Sec. 101(b), Housing and Urban Development Act of 1968, Public Law 90-448. ap- 
proved Aug. 1, 1968, S2 Stat. 476, 483, inserted this proviso: further amended by Housing 
and Community Development Act of 1977, Public Law 95-128 approved October 12, 1977, 
as set forth in the text. 

«Sec. 113(e), Housing and Urban Development Act of 1969, Public Law 91-152 ap- 
proved December 24, 19H9, 83 Stat. 379. 384. substituted "$21,000" for "$17,500", "$24.- 
000" for ".'?;20.000". "$30,000" for "$25,000". "$38,400" for "$32,000". and "$45,600" 
for $38,000". Sec. 302(c) (2) of Housing and Communitv Development Act of 1974, Public 
Law 93-383. 88 Stat. 633. approved August 22. 1974. substituted "$25,200" for "$21,000", 
"$■28,800" for "$24,000". "$36 000" for "$30,000". "$46,080" for "$38,400". and 
"$54,720" for "$45,600". Sec. 3(d)(2) of the Housing Authorization Act of 1976. Public 
Law 94-375, approved August 3. 1976. 90 Stat. 1067. amended section 221(d)(2)(A) by 
Striking out in the second proviso "$25,200" and "$28,800" and inserting in lieu thereof 
"$29,000" and "$33,000" ; further amended bv Housing and Community Development Act 
of 1977, Public Law 95-128 approved October 12, 1977. as set forth in the text. 

*Sec. 101(b), Housing and Urban Development Act of 1968, Public Law 90-448, ap- 
proved Aug. 1, 1968, 82 Stat. 476, 483, inserted "in cash or Its equivalent". 



235 



§221 NATIONAL HOUSING ACT 

centum of the appraised value; ^ Provided further^ That, if the 
mortgagor is the owner and an occupant of the property, such 
mortgagor shall to the maximum extent feasible be given the op- 
portunity to contribute the value of his labor as equity in such 
dwelling ; or 

(o) ^ if executed by a mortgagor which is a public body or agency 
(and, except with respect to a project assisted or to be assisted 
pursuant to section 8 of the United States Housing Act of 1937, 
which certifies that it is not receiving financial assistance from 
the United States exclusively pursuant to such Act),^ a coopera- 
tive (including an investor-sponsor who meets such requirements 
as the Secretar}^ may impose to assure that the consumer interest 
is protected), or a limited dividend corporation (as defined by the 
Secretary), or a private nonprofit corporation or association, or ^ 
other mortgagor approved by the Secretary, and regulated or 
supervised under Federal or State laws or by political subdivisions 
of States, or agencies thereof, or by the Secretary under a regu- 
latory agreement or otherwise, as to rents, charges, and methods 
of operation, in such form and in such manner as in the opinion 
of the Secretary will effectuate the purposes of this section — 

(i)« 

(ii)' not exceed, for such part of the property or project as 
may be attributable to dw^elling use (excluding exterior land 



1 Sec 101(a)(5), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 
75 Stat 149 150, deleted the proviso which read : "And provided further. That the Com- 
missioner shall prescribe such procedures as in his judgment are necessary to secure to 
families referred to in subsection (a) above, priorities in occupancy of the remaining 
units of' two- three-, and four-family dwellings after occupancy of one unit by the owner ;", 
but see sec. 2'21(d) (3) (iii) and sec. 221(f). 

2 Same as footnote 2 on previous page. ,^. ..s „ . . ^r ^ ^ , 

3 See provisions for rent supplements m sec. 101 (j), Housing and Urban Development 

Sec 201 (c). Housing and Urban Development Act of 1968, Public Law 90-448. approved 
Aug. i, 1968, 82 Stat. 470, 502, provided that the insurance of a mortgage which had not 
been finally endorsed for insurance under sec. 221(d)(3) and which had been approved 
for the below market interest rate prescribed in the proviso of sec. 221(d)(5) could be 
transferred to section 236 (j) (the interest rate reduction program for rental housing for 
lower income families). 

Immediately prior to amendment by sec. 101(a)(6), Housing Act of 1961, Public Law 
87-70, approved June 30, 1961, 75 Stat. 149, 150, section 221(d) (3) read as follows : 

"(3) if executed by a mortgagor which is a private nonprofit corporation or association 
or otlier acceptable private nonprofit organization, regulated or supervised under Federal 
or State laws or by political subdivisions of States or agencies thereof or the Federal 
Housing Commissioner, as to rents, charges, and methods of operation, in such form and 
in such manner as, in the opinion of the Commissioner, will effectuate the purposes of this 
section, the mortgage may involve a principal obligation not in excess of $12,500.000 ; 
and not in excess of .*P9,000 per family unit for such part of such property or project as 
may be attributable to dwelling use, except that the Commissioner may by regulation in- 
crease this amount to not to exceed ,$12,000 in any geographical area where he finds that 
cost levels so require, and not in excess of (1) in the case of new construction, the amount 
which the Commissioner estimates will be the replacement cost of the property or project 
when the proposed improvements are completed (the replacement cost may include the 
land, the proposed physical improvements, utilities within the boundaries of the land, 
architect's fees, taxes, interest during construction, and other miscellaneous charges in- 
cident to construction and approved by the Commissioner), or (2) in the case of repair 
and rehabilitation, the Commissioner's estimate of the value of the property when the 
proposed repair and rehabilitation is completed ; Provided, That such property or project, 
when constructed, or repaired and rehabilitated, shall be for use as rental accommodations 
for ten or more families eligible for occupancy as provided in this section ; or". The word 
"Commissioner" was changed to "Secretary" by sec. 1 of Public Law 90-19, approved 
May 25. 1967. 81 Stat. 17. 

* Sec. 319(a) of Housing and Community Development Act of 1974, Public Law 93-383, 
88 Stat. 633. approved August 22. 3 074, amenried this spct'on. 

5 Sec. 114(a), Housing Act of 19*^'^ Pnhiin T,aw 88-560, approved September 2, 1964, 
78 Stat. 769. 778, inser^-ed. "or other mortgap-nr anprovpd by the Commissioner, and". 

« Sec. 304(e)(1) of Housing and Community Development Act of 1974, Public Law 
93-383. 88 Stat. 633, approved August 22. 3974, struck clause (i) of section 221(d)(3) of 
the National Housing Act. but did not renumber the following paragraphs. 

- Sec. 107(d) (1). Housing Act of 1964, Public Law 88-560. approved September 2, 1964, 
78 Stat. 709, 775, deleted the previous per room limits in this par. (3)(ii) on the amount 
of a mortgage and substituted dollar amount limitations based on the number of family 
units in the project with the dollar amount limitations varying according to the number 
of bedrooms in each unit. 

Sec. 113(e), Housing and Urban Development Act of 1969. Public Law 91-152, op- 
proved December 24, 1969, 83 Stat. 379, 3S4. increased by fifteen percent as shown in 
the text the dollar limits in this par. 3(ii). 

236 



NATIONAL HOUSING ACT §221 

improvements as defined by the Secretary), $21, 56^^ per family 
unit without a bedroom $24,862 ^ per family unit with one bed- 
room $29,984 ^ per family unit with two bedrooms, $38,379 ^ per 
family unit with three bedrooms, and $42,766 ^ per family unit 
with four or more bedrooms ; except that as to projects to consist 
of elevator-type structures the Secretary may, in his discretion, 
increase the dollar amount limitations per family unit to not to 
exceed $22,692 ^ per family unit without a bedroom, $26,012 ^ 
per family unit with one bedroom, $31,631 ^ per family imit with 
two bedrooms, $40,919 ^ per family unit with three bedrooms, and 
$44,917 ^ per family unit with four or more bedrooms, as the case 
may be, to compensate tor the higher costs incident to the con- 
struction of elevator-type structures of sound standards of con- 
struction and design; and except that the Secretary may, by 
regulation, increase any of the foregoing dollar amount limita- 
tions contained in this clause by not to exceed 50 per centum in any 
geographical area ^ where he finds that cost levels so require ; and 
(iii) not exceed (1) in the case of new construction, the amount 
which the Secretary estimates will be the replacement cost of 
the property or project when the proposed improvements are com- 
pleted (the replacement cost may include the land, the proposed 
physical improvements, utilities within the boundaries of the land, 
architect's fees, taxes, interest during construction, and other mis- 
cellaneous charges incident to construction and approved by the 
Secretary), or (2) in the case of repair and rehabilitation, the 
sum of the estimated cost of repair and rehabilitation and the Sec- 
retary's estimate of the value of the property before repair and 
rehabilitation: Provided^ That in no case involving refinancing 
shall such mortgage exceed such estimated cost of repair and 
rehabilitation and the amount (as determined by the Secre- 
tary) required to refinance existing indebtedness secured by the 



1 Sec. 303(d) (A) of Housing and Community Development Act of 1974, Public Law 
93-383, 88 Stat. 033. apnrovod Ausust '11, 1974. substituted ••.fll,240" for •'.S9,200". 
"S15.r)40" for "$12.9,?7.r>()", "$18,030" for "$15,52."i", "$23,400" for "$19,550". and 
"$26,570" for "$22,137.50". Sec. 8(b)(4)(A) of the Housing Authorization Act of 1976, 
Public Law 94-375, approved August 3, 1976. 90 Stat. 10'67. amended setcion 221 
(d) (3) (11) of the National Housing Act by substttutlng "$16,860" for "$11,240", "$18,648" 
for "SI 5,540", "$22,356" for "$18,630", "$28,152" for "$23,460". and "$31.S84" for 
"$26,570". Sec. 325(a) Housing and Community Development Amendments of 1978, Public 
Law 95-557, 92 Stat. 2080 approved October 31, 1978, substituted "$21,563" for $16,860". 
"$24,662" for "$18,648". "$29,984" for "$22,356". and "$38,379" for "$28,152". 

2 Sec. 303(d) (A) of Housing and Community Development Act of 1974, Public Law 
93-383, 88 Stat, 033, approved August 22, 1974, substituted "$11,240" for "$9,200". 
"$15 540" for "S12,9.^7.r.O", "$18,630" for "$15,525". "*23.460" for "$19,550", and 
"$26,570" for "$22,137.50". Sec. 8(b)(4)(A) of the Housing Authorization Act of 1976, 
Public I>aw 94-375. approved August 3, 1076. 90 Stat. 1067, amended section 221 
(d)(3) (li) of the National Housing Act by substituting "16,860" for "$11,240", "$18,648" 
for "$15,540", "$22,356" for "$18,630", "$28,152" for "$23,460", and "31,884" for 
"$26,570". Sec. 325(a). Housing and Community Development Amendment of 1978. P.L. 
95-557, 92 Stat. 2080. approved October 31, 1978, substituted "$42,756" for "$31,884 . 

3 Sec. 303(d) (B) of the Housing and Community Development Act of 1974, Public Law 
93-383, 88 Stat. 033. approved August 22. 1974. amended section 221(d) (3) (11) of the 
National Housing Act by substituting "$13,120" for "$10,925". "$18,630" for "$15,500", 
"$22,080" for "$18,400", "$27,600" for "$23,000", and "$32,000" for "$26,162.50". Sec. 
8(b)(4)(B) of the Housing Authorization Act of 1976, Public Law, 94-375. approved 
August 3, 1976. 90 Stat. 1067. amended this section by substituting "$19.'680" for 
"$13,120". "$22,356" for "$18,630", "$26,496" for "$22,080", "$33,120" for "$27,600". 
and "38.400" for "32,000". Sec. 325(a), Housing and Community Development Amendment 
of 1978, P.L. 95-557, 92 Stat. 2080, approved October 31, 1978, substUuted "$22 692 for 
"S19,680", "$26,012" for "$22,356", "$31,631" for "$26,496", "$40,919" for "$33,120 , 
"$44,917" for "$38,400". . „„ .^..^ 

« Sec. 3 of Public Uaw 94-173, 89 Stat. 1027, approved December 23 1975. amended 
«ec. 221(d) (3) (11) of the National Housing Act by deleting the words by not to exceed 
45 per centum In anv geographical area" and inserting the words bv not to exceed /o 
per centum In any geographical area". Sec. 8(a> of the Housing Authorisation Act of 1976. 
Public Law 94-375. approved August 3, 1976. 90 Stat. 1067, amended section 221(d) (3) (ID 
of the National Housing Acfbv striking "by not to exceed 75 per centum In any geo- 
gr.nphlcal area" and inserting In lieu thereof "by not to exceed 50 per centum In any 
geographical area". _ 

237 



§221 NATIONAL HOUSING ACT 

property or project: Fromded furtker^ That the mortgage may 
involve the financing of the purchase of property which has been 
rehabilitated by a local public agency with Federal assistance pur- 
suant to section 110(c) (8) of the Housing Act of 1949, and, in 
such case, the amount of the mortgage shall not exceed the ap- 
praised value of the property as of the date the mortgage is ac- 
cepted for insurance : Provided furtlier^ That in the case of any 
mortgagor other than a nonprofit corporation or association, co- 
operative (including an investor-sponsor), or public body, or a 
mortgagor meeting the special requirements of subsection (e) (1), 
the amount of the mortgage shall not exceed 90 per centum of the 
amount otherwise authorized under this section : Provided further^ 
That such property or project, when constructed, or repaired and 
rehabilitated, shall be for use as a rental or cooperative project, 
and low and moderate income families or displaced families ^ 
shall be eligible for occupancy in accordance with such regulations 
and procedures as may be prescribed by the Secretary and the Sec- 
retary may adopt such requirements as he determines to be desir- 
able regarding consultation with local public officials where such 
consultation is appropriate by reason of the relationship of such 
project to projects under other local programs ; or 

(4)^ if executed by a mortgagor and which is approved by the 
Secretary — 

(i)^ 

(ii)^ not exceed, or such part of the property or project as may 
be attributable to dwelling use (excluding exterior land improve- 
ments as defined by the Secretary), $19,406^ per family unit 
without a bedroom, $22,028 ^ per family unit with one bedroom 
$26,625 ^ per family unit with two bedrooms, $33,420 ^ per family 
unit with three bedrooms, and $37,870 ^ per family unit with 
four or more bedrooms; except that as to projects to consist of 
elevator-type structures the Secretary may, in his discretion, in- 
crease the dollar amount limitations per family unit to not to 



1 Sec. 311(b). Housing and Urban Development Act of 1968. Public Law 90-448, ap- 
proved Aug. 1, 19B8, 82 Stat. 476. 510. inserted this proviso. 

2 Sec. 114(c). Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 
78 Stat. 769, 779, inserted tliis proviso. 

3 Sec. 4(a). Disaster Relief Act of 1966, Public Law 89-769, approved November 6. 
1966, 80 Stat. 1316, 1317, substituted "displaced families" for "families displaced by 
urban renewal or other governmental action". 

*Sec. 110(c)(3). Housing Act of 1959. Public Law 86-372, approved September 23, 
1959, 73 Stat. 654, 660, inserted paragraph (4) ; the Supplemental Housing Authorization 
Act of 1977, Public Law 95-24, approved April 30, 1977, amended paragraph (4). 

5 Sec 304(e)(2) of Housing and Community Development Act of 1974. Public Law 
93-383, 88 Stat. 633, approved August 22, 1974, struck clause (1) of section 221(d) (4) of 
the National Housinsr Act. but did not renumber the follOAvins paragraphs. 

« Sec. 107(d) (2). Housing Act of 1964. Public Law 88-560, approved September 2, 1964, 
78 Stat. 769, 775, 776, deleted the previous per room limits in this par. (4) (ii) on the 
amount of a mortgage and substituted dollar amount limitations based on the number 
of family units in the project with the dollar amount limitations varying according to the 
number of bedrooms in each unit. 

Sec. 113(e), (5) and (6), Housing and Urban Development Act of 1969, Public Law 
91-152, approved December 24, 1969, 83 Stat. 379, 384, increased by fifteen percent as 
shown in the text the dollar limits in this par. 4(ii). 

''Sec. 303(e)(1) of Housing and Community Development Act of 1974. Public Law 
93-383, 88 Stat. 633, approved August 22, 1974, substituted ".$12,300" for "$9,200". 
"$17,188" for "$12,937.50", "$20,525" for "$15,525", "$24,700" for "$19,550", and 
"$29,038" for "$22,137.50". Sec. 8(b)(5)(A) of the Housing Authorization Act of 1976. 
Public Law 94-375, approved August 3, 1976. 90 Stat. 1067. amended section 221(d)(4) 
(li) of the National Housing Act by substituting "$18,450" for "$12,300". "$20,625" for 
"$17,188", "$24,630" for "$20,525", "$29,640" for "$24,700", and "$34,846" for "$29,038". 

Sec. 325(b). Housing and Community Development Amendments of 1978. P.L. 95-557. 
92 Stat. 2080, approved October 31. 1978, substituted "$19,406" for "$18,450", "$22,028" 
for "$20,625'', ^'$26,625" for "$24,630", "$33,420" for "$29,640", and $37,870" for 
"$34,846". 



238 



NATIONAL HOUSING ACT §221 

exceed $20,962 ^ per family unit without a bedroom. $21,030 ^ 
per family units with one bedroom, $29,220 ^ per family miit with 
two bedrooms. $37,800 ^ per family unit with three bedrooms, 
and $41,494 ^ per family unit with four or more bedrooms, as 
the case may be, to compensate for the higher costs incident to 
the construction of elevator-type structures of sound standards 
of construction and design: and except that the Secretary may. by 
regulation, increase any of the foregoing dollar amoujit limita- 
tions contained in this clause by not to exceed 50 per centum in 
any geographical area ^ where he finds that co?t levels so require : 

(iii) not exceed (in the case of a property or project approved 
for mortgage insurance prior to the beginning of construction) 90 
per centum of the amoimt which the Secretary estimates will be 
the replacement cost of the property or project when the proposed 
improvements are completed (the replacement cost may include 
the land, the proposed physical improvements, utilities within the 
boundaries of the land, architect's fees, taxes, interest during con- 
struction, and other miscellaneous charges incident to construction 
and approved by the Secretary, and shall include an allowance for 
builder's and sponsor's profit and risk of 10 per centum of all of 
the foregoing items, except the land, unless the Secretary, after 
certification that such allowance is unreasonable, shall by regula- 
tion prescribe a lesser percentage ; and 

(iv)2 not exceed 90 per centum of the sum of the estimated cost 
of repair and rehabilitation and the Secretary's estimate of the 
value of the property before repair and rehabilitation of the 
proceeds of the mortgage are to be used for the repair and reha- 
bilitation of a property or project : Provided, That in no case in- 
volving refinancing shall such mortgage exceed such estimated 
cost of repair and rehabilitation and the amount (as determined 
by the Secretary) required to refinance existing indebtedness 
secured by the property or project : Provided further^ That the 
Secretary may, in his discretion, require the mortgagor to be 
regulated or restricted as to rents or sales, charges, capital struc- 
ture, rate of return, and methods of operation, and for such pur- 
pose the Secretary' ma}' make such contracts with and acquire 
for not to exceed $100 such stock or interest in any such mortgagor 



1 Sec. 303(e)(2) of Housing and Communitv Development Act of 1974. Public Law 
93-3S3. 8S Stat. 633. approved August 22. 1974. substituted "S13.975" for "$10,525". 
•'.$20. 025'" for "515.525". '•$24,350" for '•S1S.400"". ".«31.o00" for "S23.000", and "S34.578" 
for "$26,162.50". Sec. 8(b)(5)(B) of the Housing Authorization Act of 1976, Public 
I>aw 94-375, approved August 3, 1976. 90 Stat. 1067. further amended section 221(d) 
'4)(11) of the National Housing Act by substituting "S20.962" for "$13,975". "?24.030" 
for "$20,025", "$29,220" for "$24,350", "$37,800" for "$31,500", and "$41,494" for 
•$34,578". 

- Sec. 3 of Public Law 94-173. 89 Stat. 1027. approved December 23. 1975. amended sec. 
221(d) (4) (11) of the National Housing Act by deleting the words "by not to exceed 45 
per centum in any geographical area" and Inserting the words "by not to exceed 75 per 
centum In any geographical area". Sec. 8(a) of the Housing Authorization Act of 1976, 
Public Law 94-375. approved August 3. 1976. 90 Stat. 1067, amended section 221(d)(4) 
fii) of the National Housing Act by striking "by not to exceed 75 per centum in any 
geographical area" and inserting in lieu thereof "by not to exceed 50 per centum In any 
geographical area". 

^ The language through the first proviso in par. (iv) was substituted bv sec. 101(a) (9), 
Housing: Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149. 151. for 
the following : 

"(iv) not exceed 90 per centum of the Commissioner's estimate of the value of the 
property or project when the proposed repair and rehabilitation is completed If the pro- 
ceeds of the mortgaee are to be used for the repair and rehabilitation of property or project : 
Provided, That such property or project when constructed, or repaired and rehabilitated, 
shall hp for use as rental accommodations for ten or more families eligible for occupancy 
as provided In this section ; And provided further.". 



289 



§221 NATIONAL HOUSING ACT 

as the Secretary may deem necessary to render effective such 
restrictions or regulations, with such stock or interest being paid 
for out of the General Insurance Fund and being required to be 
redeemed by the mortgage at par upon the termination of all 
obligations of the Secretary under the insurance ; 

(5)^ bear interest (exclusive of premium charges for insurance 
and service charge, if any) at not to exceed 5 per centum per an^ 
num on the amount of the principal obligation outstanding at any 
time, or not to exceed such per centum per annum not in excess of 
6 per centum as the Secretary finds necessary to meet the mort- 
gage market; and contain such terms and provisions with r^^pc^t 
to the application of the mortgagor's periodic payment to amorti^ 
zation of the principal of the mortgage, insurance, repairs, altera- 
tions, payment of taxes, default reserves, delinquency charges, 
foreclosure proceedings, anticipation of maturity, additional and 
secondary liens, and other matters as the Secretary may in his 
discretion prescribe: Provided f That a mortgage insured under 
the provisions of subsection (d) (3) shall bear interest (exclusive 
of any premium charges for insurance and service charge, if any) 
at not less than the ^ lower of (A) 3 per centum per annum, or 
(B) the annual rate of interest determined, from time to time by 
the Secretary of the Treasury at the request of the Secretary, by 
estimating the average market yield to maturity on all outstand- 
ing marketable obligations of the United States, and by adjust- 
ing such yield to the nearest one-eighth of 1 per centum, and there 
shall be no differentiation in the rate of interest charged under 
this proviso as between mortgagors under subsection (d) (3) on 
the basis of differences in the types or classes of such mortgagors ; 
and 

(6)* provide for complete amortization by periodic payments 
within such terms as the Secretary may prescribe, but as to 
mortgages coming within the provisions of subsection (d) (2) not 
to exceed from the date of the beginning of amortization of the 
mortgage (i) 40 years in the case of a displaced family, (ii) 35 
years in the case of any other family if the mortgage is approved 
for insurance prior to construction, except that the period in such 
case may be increased to not more than 40 years where the 
mortgagor is an owner-occupant of the property and is not able, 
as determined by the Secretary, to make the required payments 



iSec. 101(a) (10), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 
75 Stat. 149, 151, inserted par. (6) of this subsection and deleted the following from the 
beginning of paragraph (5) : 

"(5) provide for complete amortization by periodic payments within such terms as the 
Commissioner may prescribe, but not to exceed fortv years from the date of insurance of 
the mortgage or three-quarters of the Commissioner s estimate of the remaining economic 
life of the building improvements, whichever is the lesser :". 

2 Sec. 101(a) (11). Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 
75 Stat. 149, 152, added this proviso. Section 201(c) Housing and Urban Development Act 
of 1968, Public Law 90-448, approved August 1, 1968, 82 Stat. 476, 502, provides : 

"The Secretary of Housing and Urban Development is authorized, upon such terms and 
conditions as he may prescribe, to transfer to section 236fj) of the National Housing Act 
the insurance of a mortgage which has not be [sic] finally endorsed for insurance under 
section 221(d) (3) of such Act and which has been approved for the below-market interest 
rate prescribed in the proviso of section 221(d) (5) of such Act." 

3 The words "the lower of (A) 3 per centum per annum, or (B)" inserted by sec. 102(b). 
Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 
1965 79 Stat. 451 454. 

♦Added by sec. 'l01(a)(10). Housing Act of 1961, Public Law 87-70 approved June 30, 
1961, 75 Stat. 149. 151, except that in clause (i), sec. 4(a), Disaster Relief Act of 1966, 
Public Law 89-769, approved November 6, 1966, 80 Stat. 1316, 1317, substituted "dis- 
placed family" for "family displaced from an urban renewal area or as a result of govern- 
mental action.". 



240 



NATIONAL HOUSING ACT §22l 

under a mortgage having a shorter amortization period, and (iii) 
30 years in the case of any other family where the mortgage is not 
approved for insurance prior to construction : Provided^ That no 
mortgage insured under subsection (d) (2) shall have a maturity 
exceeding three-quarters of the Secretary's estimate of the re- 
maining economic life of the building improvements. 
(e)(l)^ A mortgagor which may be approved by the Secretary 
as provided in subsection (d) (3) includes a mortgagor which, as a 
condition of obtaining insurance of the mortgage and prior to the 
submission of its application for such insurance, has entered into an 
agreement (in form and substance satisfactory to the Secretary) 
with a private nonprofit corporation eligible for an insured mortgage 
under the provisions of subsection (d) (3), that the mortgagor will 
sell the project when it is completed to the corporation at the actual 
cost of the project, as certified pursuant to section 227 of this Act. 
The mortgagor to whom the property is sold shall be regulated or 
supervised by the Secretary as provided in subsection (d) (3) to 
effectuate its purposes. 

(2) The Secretary may at any time, under such terms and condi- 
tions as he may prescribe, consent to the release of the mortgagor 
from his liability under the mortgage or the credit instrument secured 
thereby, or consent to the release of parts of the mortgaged property 
from the lien of the mortgage. 

(f ) The property or project shall comply with such standards and 
conditions as the Secretary may prescribe to establish the accept- 
ability of such property for mortgage insurance and may include such 
commercial and community facilities as the Secretary deems ade- 
quate to serve the occupants : Provided^ That in the case of any such 
property or project located in an urban renewal area, the provisions of 
section 220(d) (3) (B) (iv) shall apply with respect to the nond welling 
facilities which may be included in the mortgage^: Provided fur- 
ther^^ That in the case of a mortgage wliich bears interest at the below- 
market interest rate prescribed in the proviso of subsection (d) (5), 
the provisions of section 220(d) (3) (B)(iv) shall only apply if the 
mortgagor waives the right to receive dividends on its equity invest- 
ment in the portion thereof devoted to commercial facilities. 

A ^ property or project covered by a mortage insured under the 
provisions of subsection (d) (3) or (d) (4) shall include five or more 
family units: Provided^^ That such units, in the case of a project 
designed primarily for occupancy by displaced, elderly, or handi- 
capped families, need not, with the approval of the Secretary, contain 
kitchen facilities, and such projects may include central dining and 
other shared facilities. The Secretary is authorized to adopt such 
procedures and requirements as he determines are desirable to assure 
that the dwelling accommodations provided under this section are 

iSec. 114(b), Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 
Stat. 769, 778, added paragraph (1). 

2 See. 308, Demonstration Cities and Metropolitan Development Act of 1966, Public 
Law 89-754. approved November 3, 1966, 80 Stat. 1255. 1268, added this proviso. 

3 Sec. 306, Housing and Urban Development Act of 1968, Public Law 90-448, approved 
Aug. 1, 1968, 82 Stat. 476. 508, deleted "if the mortgagor waives the right to receive divi- 
dends on its equity investment in the portion thereof devoted to community and shopping 
facilities". 

4 Sec. 306. Housing and Urban Development Act of 1968, Public Law 90-448, approved 
Aug. 1, 19G8, 82 Stat. 476, 508, inserted this proviso. 

6 Sec. 101(a) (12), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 
75 Stat. 149, 152, inserted the remainder of this par. (f ). 

°S«>e. 115(a)(1). Housing and Urban Development Act of 1970, Public Law 91-609, 
approved December 31, 1970. 84 Stat. 1770, 1773, inserted this proviso. 

241 



§221 NATIONAL HOUSING ACT 

available to displaced families.^ Notwithstanding any provision of 
this Act, the Secretary, in order to assist further the provision of 
housing for low and moderate income families, in his discretion and 
under such conditions as he may prescribe, may insure a mortgage 
which meets the requirements of subsection (d) (3) of this section as 
in effect after the date of enactment of the Housing Act of 1961, or ^ 
which meets the requirements of subsection (h), (i), or (j)^ with no 
premium charge, with a reduced premium charge, or with a premium 
charge for such period or periods during the time the insurance is in 
effect as the Secretary may determine, and there is hereby authorized 
to be appropriated, out of any money in the Treasury not otherwise 
appropriated, such amounts as may be necessary to reimburse the 
General Insurance Fund for any net losses in connection with such 
insurance. No mortgage shall be insured under this section after 
September 30, 1979,* except pursuant to a commitment to insure before 
that date, or except a mortgage covering property which the Secretary 
finds will assist in the provision of housing for displaced families. 
Any person ^ who is sixty-two years of age or over, or who is a handi- 
capped person within the meaning of section 202 of the Housing Act 
of 1959, or who is a displaced person, shall be deemed to be a family 
within the meaning of the terms "family" and "families" as those 
terms are used in this section. Low- ^ and moderate-income persons 
who are less than 62 years of age shall be eligible for occupancy of 
dwelling units in a project financed with a mortgage insured under 
subsection (d)(3).'^ 

^ In ^ any case in which it is determined in accordance with regula- 
tions of the Secretary that facilities in existence or under construc- 
tion on the date of enactment of the Housing and Urban Development 
Act of 1970 which could appropriately be used for classroom purposes 

iSec. 4(a). Disaster Relief Act of 1966, Public Law 89-769, approved November 6, 
19G6, 80 Stat. 1316, 1317, substituted ^'displaced families" for "families displaced from 
urban renewal areas or as a result of governmental action". 

2 Sec. 210(c). Demonstration Cities and Metropolitan Development Act of 1966, Public 
Law 89-754, approved November 3. 1966, 80 Stat. 1255, 1270. added this clause. 

3 Sec. 105(d). Housing and Urban Development Act of 1968, Public Law 90-448, approved 
Aug. 1, 1968, 82 Stat. 470, 490. inserted "(i) or (j)". 

* Sec. 2(c) of Public Law 91-78, approved September 30, 1969, 83 Stat. 125, extended 
the expiration date for the insurance of mortgages under sec. 221 from October 1, 1969, 
to January 1, 1970, and sec. 101(c), Housing and Urban Development Act of 1969, Public 
Law 91-152, approved December 24, 1969, 83 Stat. 379, further extended such expiration 
date from January 1, 1970. to October 1, 1970. This expiration date was subsequently 
extended as follows: (1) To November 1, 1970, by sec. 1(c) of Public Law 91-432, 
approved October 2, 1970, 84 Stat. 886; (2) to December 1, 1970, by sec. 1(c) of Public 
Law 91-473, approved October 21. 1970, 84 Stat. 1064 ; (3) to January 1, 1971, by sec. 1(c) 
of Public Law 91-525. approved December 1, 1970, 84 Stat. 1384; (4) to October 1, 1972, 
by sec. 101 (c). Housing and Urban Development Act of 1970, Public Law 91-609, approved ; 
(5) to June 30, 1973, by sec. 1(c) of Public Law 92-503. approved October 18. 1972, 86 
Stat. 906; (6) to October 1, 1973, by sec. 1(c) of Public Law 93-85, approved August 10, 
1973, 87 Stat. 220; (7) to October 1. 1974, by sec. 1(c) of Public Law 93-117, approved 
October 2, 1973. 87 Stat. 421; and (8) sec. 316(c) of Housing and Community Develop- 
ment Act of 1974, 88 Stat. 633. approved August 22, 1974. substituted "June 30. 1977" for 
"October 1, 1974". Amended by Housing and Community Development Act of 1977, Public 
Law 95-128, approved October 12, 1977. (Public Law 95-60 approved June 30, 1977, 
had previously extended the date from June 30, 1977 to Julv 31, 1977, Public Law 95-80, 
approved July 31, 1977, had further extended the date from July 31, 1977 to September 30, 
1977). This was further amended by section 301(c) of the Housing and Community De- 
velopment Amendments of 1978. Public Law 95-557, 92 Stat. 2080, approved October 31, 
1978. 

5 Sec. 202. Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 
769, 783, amended sec. 221(f) to include persons 62 years of age or over, and sec. 203(b). 
Housing Act of 1964, 78 Stat. 769. 784, further amended this section to include handicapped - 
persons. Sec. 115(a)(2)(A), Housing and Urban Development Act of 1970. Public Law 
91-609, approved December 31. 1970, 84 Stat. 1770, 1773, subsequently amended this sec- 
tion to include displaced persons. 

« Sec. 309. Demonstration Cities and Metropolitan Development Act of 1966, Public 
Law 89-754, approved November 3. 1966, 80 Stat. 1255. 1268. added this sentence. 

"7 Sec. 4 (a) of Public Law 94-173, 89 Stat. 1927, approved December 23, 1975, amended 
sec. 221(f) of the National Housing Act by deleting the words ", but not more than 10 per 
centum of the dwelling units in any such project shall be available for occupancy by such 
persons". 

8 Sec. 114(a), Housing and Urban Development Act of 1970, Public Law 91-609, ap- 
proved December 31, 1970, 84 Stat. 1770, 1773, added this sentence. 

242 



I 



NATIONAL HOUSING ACT §221 

are available in any such property or project and that public schools 
in the community are overcrowded due in part to the attendance at 
such schools of residents of the property or project, such facilities may 
be used for such purposes to the extent permitted in such regulations 
(without being subject to any of the requirements of the proviso in 
section 220(d) (3) (B) (iv) except the requirement that the project be 
predominantly residential). 

As^ used in this section the terms "displaced family", "displaced 
families", and "displaced person" shall mean a family or families, or a 
person, displaced from an urban renewal area, or as a result of govern- 
mental action, or as a result of a major disaster as determined by the 
President pursuant to the Disaster Belief Act of 1970. 

(g) The mortgagee shall be entitled to receive the benefits of the 
insurance as hereinafter provided — 

(1) as to mortgages meeting the requirements of paragraph 
^2) of subsection (d) of this section, paragraph (5) of subsection 
(h) of this section, or paragraph (2) of subsection (i) of this 
section as provided in section 204(a) of this Act with respect to 
mortgages insured under section 203, and the provisions of sub- 
sections (b), (c), (d), (e), (f), (g), (h), (j),and (k) of section 
204 of this Act shall be applicable to such mortgages insured under 
this section, except that all references therein to the Mutual 
Mortgage Insurance Fund or the Fund shall be construed to refer 
to the General Insurance Fund and all references therein to section 
203 shall be construed to refer to this section ; or 

(2) as to mortgages meeting the requirements of paragraph (3) 
or (4) of subsection (d) of this section, paragraph (1) of subsec- 
tion (h) of this section, or paragraph (2) of subsection (j) of 
this section, as provided in section 207(g) of this Act with respect 
to mortgages insured under said section 207, and the provisions of 
subsections (h), (i), (j), (k), and (1) of section 207 of this Act 
shall be applicable to such mortgages insured under this section ; 
or 

(3)^ as to mortgages meeting the requirements of this section 
which are insured or initially endorsed for insurance on or after 
the date of enactment of the Housing Act of 1961,^ notwithstand- 
ing the provisions of paragraphs (1) and (2) of this subsection, 
the Secretary in his discretion, in accordance with such regu- 
lations as he may prescribe, may make payments pursuant to such 
paragraphs in cash or in debentures (as provided in the mortgage 
insurance contract) , or may acquire a mortgage loan that is in de- 
fault and the security therefor upon payment to the mortgagee in 
cash or in debentures (as provided in the mortgage insurance con- 
tract) of a total amount equal to the unpaid principal balance of 
the loan plus any accrued interest and any advances approved by 
the Secretary and made previously by the mortgagee under the 
provisions of the mortgage, and after the acquisition of any 
such mortgage by the Secretary the mortgagee shall have no 

» Sec. 115(a) (2) (B), Housing and Urban Development Act of 1970, Public Law 91-609, 
approved December 31, 1970, 84 Stat. 1770, 1773, Inserted the reference to displaced persons. 
The sentence was originally added by sec. 4(b), Disaster Relief Act of 1966, Public Lav^ 
89-769. approved November 6. 1966. 80 Stat. 1316, 1317. Sec. 602(d) of Disaster Relief 
Act of 1974, Public Law 93-288. 88 Stat. 143, approved May 22, 1974, substituted the 
Disaster Relief Act of 1974" for "the Disaster Relief Act of 1970". 

« Sec. 101(a) (13), Housing Act of 1961, PubUc Law 87-70, approved June 30, 1961, 75 
Stat. 149. 153. inserted par. (3). 

•June 30. 1961. 

243 



§221 NATIONAL HOUSING ACT 

further rights, liabilities, or obligations with respect to the loan 
or the security for the loan. The appropriate provisions of sec- 
tions 204 and 207 relating to the issuance of debentures shall apply 
with respect to debentures issued under this paragraph, and the 
appropriate provisions of sections 204 and 207 relating to the 
rights, liabilities, and obligations of a mortgagee shall apply with 
respect to the Secretary when he has acquired an insured mort- 
gage under this paragraph, in accordance with and subject to 
regulations (modifying such provisions to the extent necessary to 
render their application for such purposes appropriate and ef- 
fective) which shall be prescribed by the Secretary, except that 
as applied to mortgages so acquired (A) all references in section 
204 to the Mutual Mortgage Insurance Fund or the fund shall 
be construed to refer to the General Insurance Fund, and (B) all 
references in section 204 to section 203 shall be construed to refer 
to this section. If ^ the insurance is paid in cash, there shall be 
added to such payment an amount equivalent to the interest which 
the debentures would have earned, computed to a date to be estab- 
lished pursuant to regulations issued by the Secretary. 

(4)2 In the event any mortgage insured under this section is 
not in default at the expiration of twenty years from the date the 
mortgage was endorsed for insurance, the mortgagee shall, with- 
in a period thereafter to be determined by the Secretary, 
have the option to assign, transfer, and deliver to the Secre- 
tary the original credit instrument and the mortgage secur- 
ing the same and receive the benefits of the insurance as here- 
inafter provided in this paragraph, upon compliance with such 
requirements and conditions as to the validity of the mortgage as 
a first lien and such other matters as may be prescribed by the 
Secretary at the time the loan is endorsed for insurance. Upon 
such assignment, transfer, and delivery the obligation of the 
mortgagee to pay the premium charges for insurance shall cease, 
and the Secretary shall, subject to the cash adjustment provided 
herein, issue to the mortgagee debentures having a total face 
value equal to the amount of the original principal obligation 
of the mortgage which was unpaid on the date of the assignment, 
plus accrued interest to such date. Debentures issued pursuant to 
this paragraph shall be issued in the same manner and subject 
to the same terms and conditions as debentures issued under para- 
graph (1) of this subsection, except that the debentures issued 
pursuant to this paragraph shall be dated as of the date the mort- 
gage is assigned to the Secretary, shall mature ten years after 
such date, and shall bear interest from such date at the going 
Federal rate determined at the time of issuance. The term "go- 
ing Federal rate" as used herein means the annual rate of interest 
which the Secretary of the Treasury shall specify as applicable 
to the six-month period (consisting of January through June or 
July through December) which includes the issuance date of such, 
debentures, which applicable rate for each six-month period shall 
be determined by the Secretary of the Treasury by estimatincr the 
^v^rag e yield to maturity, on the basis of daily' closing market 

1 This sentence added by sec. 1(>5 (c)(2), Housing Ac*- of 1964 Public Law 88-560 
approved September 2, 1964, 78 Stat. 769, 772. s v, wi ij^o*. iruoiic i^aw »»-0bU, 

o^%^^™®^^^^^^J §^^°^ ^2 ^™^?^™^^* ^^ sec. 101(a) (13), Housing Act of 1961, Public Ivaw 
87-70. approved June 30. 1961, 75 Stat. 149, 153. this paragraph was designated as ''(3) ^ 



244 



t 

N 



NATIONAL HOUSING ACT §221 

bid quotations or prices durinor the month of May or the month 
of Xovember, as the case may be, next preceding such six-month 
period, on all outstanding marketable obligations of the United 
States having a maturity date of eight to tAvelve years from the 
first day of such month of ^lay or Xovember (or, if no such obli- 
gations are outstanding, the obligation next shorter than eight 
years and the obligation next longer than twelve years, respec- 
tively, shall be used), and by adjusting such estimated average 
annual yield to the nearest one-eighth of 1 per centum. The 
Secretary shall have the same authority with respect to mort- 
gages assigned to him under this paragraph as contained in sec- 
tion 207 (k) and section 207(1) as to mortgages insured by the 
Secretary and assigned to him under section 207 of this Act. 
(h) (1)^ In addition to mortgages insured under the other provi- 
sions of this section, the Secretary is autliorized. upon application by 
the mortgagee, to insure under this subsection as hereinafter provided 
any mortgage (including advances under such mortgage during re- 
habilitation) which is executed by a nonprofit organization to finance 
the purchase and rehabilitation of deteriorating or substandard hous- 
ing for subsequent resale to low-income home purchasers and, upon 
such terms and conditions as the Secretary may prescribe, to make 
commitments for the insurance of such mortgages prior to the date of 
their execution or disbursement thereon. 

(2) To be eligible for insurance under paragraph (1) of this sub- 
section, a mortgage shall — 

(A) 2 be executed by a private nonprofit corporation or associa- 
tion, approved by tlie Secretary, for financing the purchase and 
rehabilitation (with the intention of subsequent resale) of prop- 
erty comprising one or more tracts or parcels, whether or not con- 
tiguous, upon which there is located deteriorating or substandard 
housing consisting of (i) four or more single-family dwellings of 
detached, semidetached, or row construction, or (ii) four or more 
one-family units in a structure or structures for which a plan of 
family unit ownership approved by the Secretary is established : 

(B) be secured by the property which is to be purchased and 
rehabilitated with the proceeds thereof ; 

(C) be in a principal amount not exceeding the appraised value 
of the property at the time of its purchase under the mortgage 
plus the estimated cost of the rehaljilitation ; 

(D) bear interest (exclusive of premium charged for insurance 
and service charge, if any) at the rate in effect under the proviso 
in subsection (d)(5) at the time of execution ; 

(E) provide for complete amortization (subject to paragraph 
(5) (E) ) by periodic payments within such term as the Secretary 
may prescribe ; and 

(E) provide for the release of individual single-family dwell- 
ings from the lien of the mortgage upon the sale of the rehabili- 
tated dwellings in accordance with paragraph (5) . 



iSec. 310(a), Demonstration Cities and MetropoUtan Development Act of 1966, Public 
Law 89-754. approved November 3. 1966. 80 Stat. 1255. 1268 added subsec. (J)- ^^ , 
2 Sec. 316(a) Housing and Urban Development Act of 1968, Public Law 90-448^ approved 
August 1, 1968, 82 Stat. 476, 512. amended paragraph (A) to decrease from o to 4 tbe 
minimum number of units In a project and to permit section 221(h) insurance for housing 
consisting of units in a condominium structure. 



245 



§221 NATIONAL HOUSING ACT 

(3) No mortgage shall be insured under paragraph (1) unless the 
mortgagor shall have demonstrated to the satisfaction of the Secre- 
tary that (A) the property to be rehabilitated is located in a neigh- 
borhood which is sufficiently stable and contains sufficient public 
facilities and amenities to support long-term values, or (B) the 
rehabilitation to be carried out by the mortgagor plus its related 
activities and the activities of other owners of housing in the neigh- 
borhood, together with actions to be taken by public authorities, will 
be of such scope and quality as to give reasonable promise that a stable 
environment will be created in the neighborhood. 

(4) The aggregate principal balance of all mortgages insured under 
paragraph (1) and outstanding at any one time shall not exceed 
$50,000,000.1 

(5) (A) No mortgage shall be insured under paragraph (1) unless 
the mortgagor enters into an agreement (in form and substance satis- 
factory to the Secretary) that it will offer to sell ^ the dwellings in- 
volved, upon completion of their rehabilitation, to individuals or fam- 
ilies (hereinafter referred to as "low-income purchasers") determined 
by the Secretary to have incomes below the maximum amount speci- 
fied (with respect to the area involved) in section 101(c) (1) of the 
Housing and Urban Development Act of 1965. 

(B) The Secretary is authorized to insure under this paragraph 
mortgages executed to finance the sale of individual dwellings to low- 
income purchasers as provided in subparagraph (A) . Any such mort- 
gage shall — 

(i) be in a principal amount equal to that portion of the un- 
paid balance of the principal mortgage covering the property 
(insured under paragraph (1) ) which is allocable to the individ- 
ual dwelling involved ; and 

(ii)^ bear interest at the same rate as the principal mortgage 
or such lower rate, not less than 1 per centum, as the Secretary 
may prescribe if in his judgment the purchaser's income is suffi- 
ciently low to justify the lower rate, and provide for complete 
amortization within a term equal to the remaining term (deter- 
mined without regard to subparagraph (E)) of such principal 
mortgage: Provided^ That, if the rate of interest initially pre- 
scribed is less than the rate borne by the principal mortgage and 
the purchaser's income (as determined on the basis of periodic 
review) subsequently rises, the rate of interest so prescribed shall 
be increased (but not above the rate borne by such principal mort- 
gage), under regulations of the Secretary, to the extent appro- 

1 Sec. 101(c)(2), Housing and Urban Development Act of 1968. Public Law 90-448, 
approved Aug. 1, 1968, 82 Stat. 476, 48.S, substituted "$50,000,000" for "$20,000,000". 

2 Sec. 101(c)(4), Housing and Urban Development Act of 1968, Public Law 90-448, 
approved Au?. 1, 1968, 82 Stat. 476. 484, provides : "The purchase of any individual 

dwelling, sold by a nonprofit organization pursuant to the provisions of section 221(h) (5) 
of the National Housing Act after the date on enactment of this section, may be financed 
with a mortgage insured under the provisions of section 235(j)(4) of such A.ct but, such 
mortgage shall bear interest at the rate provided in section 235(j)(2)(C) of such Act." 

3 Sec. 101(c)(1). flousing and Urban Development Act of 1968. Public Law 90-448, ' 
approved Aug. 1, 1968, 82 Stat. 476, 483, amended paragraph (ii) to read as set forth In 
the text. Prior to this amendment paragraph (ii) read as follows: "bear Interest at the 
came rate as the principal mortgage, and provide for complete amortization by periodic 
payments within a term equal to the remaining term (determined without regard to 
subparagraph (E)) of such principal mortgage." 



246 



NATIONAL HOUSING ACT §221 

priate to reflect the increase in such income, and the mortgage 
shall so provide. 

(C) The price for which any individual dwelling is sold to a low- 
income purchaser under this paragraph shall be the amount of the 
mortgage covering the sale as determined under subparagraph (B), 
except that the purchaser shall in addition thereto be required to pay 
on account of the property at the time of purchase such amount (which 
shall not be less than $200, but which may be applied in whole or in 
part toward closing costs) as the Secretary may determine to be rea- 
sonable and appropriate in the circumstances. 

(D) Upon the sale under this paragraph of any individual dwelling, 
such dwelling shall be released from the lien of the principal mortgage, 
and such mortgage shall thereupon be replaced by an individual 
mortgage insured under this paragraph to the extent of the portion 
of its unpaid balance which is allocable to the dwelling covered by 
such individual mortgage. Until all of the individual dwellings in the 
property covered by the principal mortgage have been sold, the mort- 
gagor shall hold and operate the dwellings remaining unsold at any 
given time as though they constituted rental units in a project covered 
by a mortgage which is insured under subsection (d) (3) (and which 
receives the benefits of the interest rate provided for in the proviso in 
subsection (d) (5)). 

(E) Upon the sale under this paragraph of all of the individual 
dwellings in the property covered by the principal mortgage, and the 
release of all individual dwellings from the lien of the prmcipal mort- 
gage, the insurance of the principal mortgage shall be terminated and 
no adjusted premium charge shall be charged by the Secretary upon 
such termination. 

(F) Any mortgage insured under this paragraph shall contain a 
provision that if the low-income mortgagor does not continue to 
occupy the property the interest rate shall increase to the highest 
rate permissible under this section and the regulations of the Secre- 
tary effective at the time of commitment for insurance of the principal 
mortgage ; except that the increase in interest rate shall not be appli- 
cable if the property is sold and the purchaser is (i) the nonprofit 
organization which executed the principal mortgage (ii) a public hous- 
ing agency having jurisdiction under the United States Housing Act 
of 1937 over the area where the dwelling is located, or (iii) a low- 
income purchaser approved for the purposes of this paragraph by 
the Secretary. 

(6) ^ In addition to the mortgages that may be insured under para- 
graphs (1) and (5), the Secretary is authorized to insure under this 
subsection at any time within one year after the date of the enactment 
of this paragraph, upon such terms and conditions as he may prescribe, 
mortgages which are executed by individuals or families that meet the 
income criteria prescribed in paragraph (5) (A) and are executed for 
the purpose of financing the rehabilitation or improved of single- 
family dwellings of detached, semidetached, or row construction that 

iSec. 221(h)(6) was added by sec. 101(c)(3), Housing and Urban Development Act of 
1968, Public Law 90-448, approved Aug. 1. 1968, 82 Stat. 476, 483. 



247 



§221 NATIONAL HOUSING ACT 

are owned and occupied in each instance by a mortgagor who has 
purchased the dwelling from a nonprofit organization of the type 
described in this subsection. To be eligible for such insurance, a mort- 
gage shall — 

(A) be in principal amount not exceeding the lesser of $18,- 
000 ^ or the sum of the estimated cost of repair and rehabilitation 
and the Secretary's estimate of the value of the property before 
repair and rehabilitation, except that in no case involving re- 
financing shall such mortgage exceed such estimated cost of repair 
and rehabilitation and the amount (as determined by the Secre- 
tary) required to refinance existing indebtedness secured by the 
property; 

(B) bear interest (exclusive of premium charges for insurance 
and service charge, if any) at 3 per centum per annum or such 
lower rate, not less than 1 per centum, as the Secretary may 
prescribe if in his judgment the mortgagor's income is sufficiently 
low to justify the lower rate : Provided^ That, if the rate of interest 
initially prescribed is less than 3 per centum per annum and the 
mortgagor's income (as determined on the basis of periodic re- 
view) subsequently rises, the rate shall be increased (but not 
above 3 per centum), under regulations of the Secretary, to the 
extent appropriate to reflect the increase in such income, and the 
mortgage shall so provide ; 

(C) involve a mortgagor that shall have paid on account of 
the property at the time of the rehabilitation such amount (which 
shall not be less than $200 in cash or its equivalent, but which may 
be applied in whole or in part toward closing costs) as the Secre- 
tary may determine to be reasonable and appropriate under the 
circumstances; and 

(D) contain a provision that, if the low-income mortgagor 
does not continue to occupy the property, the interest rate shall 
increase to the highest rate permissible under this section and the 
regulations of the Secretary effective at the time the commitment 
was issued for insurance of the mortgage; except that the in- 
crease in interest rate shall not be applicable if the property is 
sold and the purchaser is (i) a nonprofit organization which has 
been engaged in purchasing and rehabilitating deteriorating and 
substandard housing with financing under a mortgage insured 
under paragraph (1) of this subsection, (ii) a public housing 
agency having jurisdiction under the United States Housing Act 
of 1937 over the area where the dwelling is located, or (iii) a low- 
income purchaser approved for the purposes of this paragraph 
by the Secretary. 

(7)^ Where the Secretary approved a plan of family unit owner- 
ship, the terms "single-family dwelling," "single-family dwellings," 
"individual dwelling," an "individual dwellings" shall mean a family 
unit or family units, together with the undivided interest (or interests) 
in the common areas and facilities. 

iSec. 113(e)(7), Housing and Urban Development Act of 1969. Public Law 91-152, 
approved December 24, 1969, 83 Stat. 379. 384, substituted "$18,000" for "$15,000". 

a Sec. 316(b), Housing aJid Urban Development Act of 1968, Public Law 90-448, approved 
August 1, 1968, 82 Stat. 476, 512 Inserted paragraphs (7) and (8). 



248 



NATIONAL HOUSING ACT §221 

(8) ^ For purposes of this subsection, the terms "single-family dwell- 
ing" and "single-family dwellings" (except for purposes of para- 
graph (7)) shall include a two- family dwelling which has been 
approved by the Secretary if one of the units is to be occupied by the 
owner. 

(i) 2 (1) The Secretary is authorized, with respect to any project 
involving a mortgage insured under subsection (d) (3) which bears 
interest at the below-market interest rate prescribed in the proviso 
of subsection (d) (5), to permit a conversion of the ownership of such 
project to a plan of family unit ownership. Under such plan, each 
family unit shall be eligible for individual ownership and provision 
shall be included for the sale of the family units, together with an 
undivided interest in the common areas and facilities w^hich serve the 
project, to low or moderate income purchasers. The Secretary shall 
obtain such agreements as he determines to be necessary to assure con- 
tinued maintenance of the common areas and facilities. Upon such sale, 
the family unit and the undivided interest in the common areas shall 
be released from tlie lien of the project mortgage. 

(2) (A) The Secretary is authorized, upon application by the mort- 
gagee, to insure under this subsection mortgages financing the pur- 
chase of individual family units under the plan prescribed in para- 
graph (1). Commitments may be issued by the Secretary for the 
insurance of such mortgages prior to the date of their execution or 
disbursement thereon, upon such terms and conditions as the Secretary 
may prescribe. To be eligible for such insurance, the mortgage shall — 
(i) be executed by a mortgagor having an income within the 
limits prescribed by the Secretary for occupants of projects 
financed with a mortgage insured under subsection (d) (3) w^hich 
bears interest at the below-market rate prescribed in the proviso 
of subsection (d) (5) ; 

(ii) involve a pnncipal obligation (including such initial serv- 
ice charges, and such appraisal, inspection, and other fees, as the 
Secretary shall approve) in an amount not to exceed the Secre- 
tary's estimate of the appraised value of the family unit, including 
the mortgagor's interest in the common areas and facilities, as of 
the date the mortgage is accepted for insurance ; 

(iii) bear interest at a rate determined by the Secretary (which 
may vary in accordance with the regulations of the Secretary 
promulgated pursuant to the last sentence of paragraph (4) of 
this subsection) but not less than the below-market rate in effect 
under the proviso of subsection (d) (5) at the date of the commit- 
ment for insurance ; and 

(iv) provide for complete amortization by periodic payments 
within such terms as the Secretary may prescribe, but not to exceed 
the lesser of forty years from the beginning of amortization of the 
mortgage or three-quarters of the Secretary's estimate of the re- 
maining economic life of the building improvements. 
(B) The price for which the individual family unit is sold to the 
low or moderate income purchaser shall not exceed the appraised 



iSec 316(b), Housing and Urban Development Act of 1968, Public Law 90-448, ap- 
proved" Aufrust 1. 1068. 82 Stat. 476. 512 inserted paragraphs (7) and (8). 

* Sec 105(a), Housing and Urban Development Act of 1968, Public Law 90-448, approved 
August 1, 1968, 82 Stat. 476, 488, added sec. 221(i). 



249 



§221 NATIONAL HOUSING ACT 

value of the property, as determined under subparagraph (A)(ii), 
except that the purchaser shall be required to pay on account of the 
property at the time of purchase at least such amount, in cash or its 
equivalent (which shall be not less than 3 per centum of such price, 
but which may be applied in whole or in part toward closing costs), 
as the Secretary may determine to be reasonable and appropriate. 

(3) Upon the sale of all of the family units covered by the project 
mortgage, and the release of all of the family units (including the 
undivided interest allocable to each unit in the common areas and facil- 
ities) from the lien of the project mortgage, the insurance of the proj- 
ect mortgage shall be terminated and no adjusted premium charge 
shall be collected by the Secretary upon such termination. 

(4) Any mortgage covering an individual family unit insured 
under this subsection shall contain a provision that, if the original 
mortgagor does not continue to occupy the property, the interest rate 
shall increase to the highest rate permissible under this section and the 
regulations of the Secretary effective at the time the commitment was 
issued for the insurance of the project mortgage; except that the 
requirement for an increase in interest rate shall not be applicable if 
the property is sold and the purchaser is (i) a nonprofit purchaser 
approved by the Secretary, or (ii) a low- or moderate-income purchaser 
who has an income within the limits prescribed by the Secretary for 
occupants of projects financed with a mortgage insured under sub- 
section (d)(3) which bears interest at the below-market rate pre- 
scribed in the proviso of subsection (d) (5). The mortgage shall also 
contain a provision that, if the Secretary determines that the annual 
income of the original mortgagor (or a purchaser described in clause 
(ii) of the preceding sentence) has increased to an amount enabling 
payment of a greater rate of interest, the interest rate of the individual 
mortgage may be increased up to the highest rate permissible under 
the regulations of the Secretary for mortgages insured under this sec- 
tion, effective at the time the commitment was issued for the insurance 
of the mortgage. 

( 5 ) For the purpose of this subsection — 

(i) the term "mortgage", when used in relation to a mortgage 
insured under paragraph (2) of this subsection, includes a first 
mortgage given to secure the unpaid purchase price of a fee inter- 
est in, or a long-term lease-hold interest in, a one-family unit in 
a multifamily project and an undivided interest in the common 
areas and facilities which serve the project ; and 

(ii) the term "common areas and facilities" includes the land 
and such commercial, communit}'', and other facilities as are 
approved by the Secretary, 
(j)^ (1) The Secretary is authorized, with respect to any rental 
project, involving a mortgage insured under subsection (d) (3) which 
bears interest at the below-market interest rate prescribed in the pro- 
viso of subsection (d) (5), to permit a conversion of the ownership of 
such project to a cooperative approved by the Secretary. Membership 
in such cooperative shall be made available only to those families hav- 

1 Sec. 105(a), Honsinp: and Urban Development Act of 1968, Public Law 90-448, approved 
Aug. 1. 1968, 82 Stat. 476, 488, added sec. 221(j). 



250 



NATIONAL HOUSING ACT §222 

ing an income within the limits prescribed by the Secretary for occu- 
pants of projects financed with a mortgage insured under subsection 
(d)(3) which bears interest as such below-market rate : Provided^ That 
families residing in the rental project at the time of its conversion to a 
cooperative who do not meet such income limits may be permitted to 
become members in the cooperative under such special terms and condi- 
tions as the Secretary may prescribe. 

(2) The Secretary is authorized, upon application by the mortgagee, 
to insure under this subsection cooperative mortgages financing the 
purchase of projects meeting the requirements of paragraph (1) . Com- 
mitments may be issued by the Secretary for the insurance of such 
mortgages prior to the date of their execution or disbursement thereon, 
upon such terms and conditions as the Secretary may prescribe. To be 
eligible for such insurance, the mortgage shall — 

(i) involve a principal obligation (including such initial service 
charges and appraisal, inspection, and other fees as the Secretary 
shall approve) in an amount not exceeding the appraised value of 
the property for continued use as a cooperative, which value shall 
be based upon a mortgage amount on which the debt service can be 
met from the income of the property when operated on a nonprofit 
basis, after the payment of all operating expenses, taxes, and 
required reserves ; 

(ii) bear interest at the below-market rate prescribed in the 
proviso of subsection (d) (5) ; and 

(iii) provide for complete amortization within such term as the 
Secretary may prescribe. 

MORTGAGE INSURANCE FOR SERVICEMEN 

Sec. 222.^ (a) The purpose of this section is to aid in the provision 
of housing accommodations for servicemen in the Armed Forces of the 
United States, servicemen in the United States Coast Guard and their 
families, and servicemen in the United States National Oceanic and 
Atmospheric Administration and their families by supplementing the 
insurance of mortgages under section 203 of this title with a system of 
mortgage insurance specially designed to assist the financing required 
for the construction or purchase of dwellings by those persons. As 
used in this section, a "serviceman" means a person to whom the Sec- 
retary of Defense (or any officer or employee designated by him), the 
Secretary of Transportation (or any officer or employee designated by 
him), or the Secretary of Commerce (or any officer or employee desig- 
nated by him), as the case may be, has issued a certificate hereunder 
indicating that such person requires housing, is serving on active duty 
in the Armed Forces of the United States, in the United States Coast 
Guard, or in the United States National Oceanic and Atmospheric 
Administration and has served on active duty for more than two years, 
but a certificate shall not be issued hereunder to any person ordered to 
active duty for training purposes only. The Secretary of Defense, the 

1 Sec. 222 was added by Sec. 124 of the Housing Act of 1954, Public Law 560, 83d Con- 
gress, approved August 2. 1954, 68 Stat. 590, 603 and amended by Public Law 91-621, 
approved December 31, 1970, 84 Stat. 1863. 1867, to Include servicemen In the United 
States National Oceanic and Atmospheric Administration and their families. 



251 



§222 NATIONAL HOUSING ACT 

Secretary of Transportation, and the Secretary of Commerce, respec- 
tively, are authorized to prescribe rules and regulations governing the 
issuance of such certificates and may v^^ithhold issuance of more than 
one such certificate to a serviceman whenever in his discretion issuance 
is not justified due to circumstances resulting from military assign- 
ment, or, in the case of the United States Coast Guard or the United 
States National Oceanic and Atmospheric Administration, other 
assignment. 

(b)^ To be eligible for insurance under this section a mortgage 
shall — 

(1) meet the requirements of section 203(b) or 203 (i),^ or 221 
(d) (2)^ or 234 (c),* except as such requirements are modified by 
this section ; 

(2) involve a principal obligation (including such initial 
service charges, appraisal, inspection, and other fees as the Sec- 
retary shall approve) in an amount not to exceed $60,000,^ except 
that in the case of a mortgage meeting the requirements of 
section 203 (i) or® section 221(d)(2) such principal obligation 
shall not exceed the maximum limits prescribed for such section ; 

(S)'^ have a principal obligation not in excess of the sum of (i) 
97 per centum of $25,000 of the appraised value of the property as 
of the date the mortgage is accepted for insurance, and (ii) 95 per 
centum of such value in excess of $25,000 ; ^ and 

(4) be executed by a mortgagor who at the time of application 
for insurance is certified as a "serviceman" and who at the time 



I 



1 Subsec. 222(b) amended to read as set forth in the text by sec. 103 of the Housing 
Act of 1957, Public Law 85-104, 85th Congress, approved July 12, 1957, 71 Stat. 294, 296. 
Sec. 104 of the Housing Act of 1957 provides further that the Secretary, in establishing 
maximum loan-to-value ratios for mortgages insured by him under sec. 222(b) "shall 
determine that such ratios are in the public interest after taking into consideration (1) 
the effect of such ratios in the national economy and on conditions in the building 
industry, and (2) availability or unavailability of residential mortgage credit assisted 
under the Servicemen's Readjustment Act of 1944, as amended." 

Prior to amendment by the Housing Act of 1957 subsec. 222(b) reads as follows: 
"(b) In addition to mortgages insured under section 203, the Commissioner may, for the 
purpose of this section, insure any mortgage under this section which would be eligible for 
insurance under section 203, except that as to mortgages so insured the maximum ratio of 
loan to value may, in the discretion of the Commissioner, exceed the maximum ratio of loan 
to value prescribed in section 203 but not to exceed in any event 95 per centum of the 
appraised value of the property and not to exceed $17,100 : Provided, That a mortgage 
insured under this section shall have been executed by a mortgagor who is a serviceman 
and who, at the time of insurance, is the owner of the property and either occupies the 
property or certifies that his failure to do so is the result of his military assignment, or, 
in the case of the United States Coast Guard, other assignment." 

2 Sec. 111(1), Housing Act of 1959, Public Law 86-372, approved September 23, 1959, 
73 Stat. 654, 661, inserted "or 203(1)". 

» Sec. 115(1), Housing Act of 1964. Public Law 88-560, approved September 2, 1964, 
78 Stat. 769, 779, inserted "or 221(d)(2),". 

* Sec. 105, Housing and Urban Development Act of 1969, Public Law 91-152, approved 
December 24, 1969, 83 Stat. 379, 381, Inserted "or 234(c),". 

^ Sec. 113(f), Housing and Urban Development Act of 1969. Public Law 91-152. approved 
December 24, 1969, 83 Stat. 379, 384, substituted "$33,000" for "$30,000". The clause 
referring to sec. 203 (i) was added by sec. 111(2). Housing Act of 1959, Public Law 
86-372, approved September 23, 1959, 73 Stat. 654, 661. 

Sec. 302(d) of Housing and Community Development Act of 1974, Public Law 93-383, 
88 Stat. 633, approved August 22, 1974, substituted "$45,000" for "$33,000". Amended by 
Housing and Community Development Act of 1977, Public Law 95-128, approved Oct. 12, 
1977 to read "$60,000" in lieu of "$45,000". 

« Sec. 115(2), Housing Act of 1964, Public Law 88-^60, approved September 2, 1964, 
78 Stat. 769, 779, added the balance of this paragraph. 

'Sec. 310(c) of the Housing and Community Development Act of 1974, Public Law 
93-383, 88 Stat. 633, approved August 22, 1974, amended subsection (3). Immediately 
prior to this amendment, this subsection read as follows : 

"(3) have a principal obligation not in excess of the sum of (i) 97 per centum of 
$15,000 of the appraised value of the property as of the date the mortgage is accepted for 
insurance, (ii) 90 per centum of such value in excess of $15,000 but not in excess of 
$25,000, and (iii) 85 per centum of such value in excess of $25,000 ; and ". 

8 Amended by Housing and Community Development Act of 1977, Public Law 95-128, 
approved October 12, 1977, to read as set forth in the text. 



252 



NATIONAL HOUSING ACT §222 

of insurance is the owner of the property and either occupies the 
property or certifies that his failure to do so is the result of his 
military assignment, or in the case of the United States Coast 
Guard or the United States National Oceanic and Atmospheric 
Administration, other assignment. 

(c) The Secretary may prescribe the manner in which a mortgage 
may be accepted for insurance under this section. Premiums fixed by 
the Secretary under section 203 with respect to, or payable^ during, 
the period of ownership by a serviceman of the property involved 
shall not be payable by the mortgagor but shall be paid not less fre- 
quently than once each year, upon request of the Secretary to the 
Secretary of Defense, the Secretary of Transportation, or the Sec- 
retary of Commerce, as the case may be, from the respective appro- 
priations available for pay and allowances of persons eligible for 
mortgage insurance under this section. As used herein, "the period of 
ownership by a serviceman" means the period, for which premiums 
are fixed, prior to the date that the Secretary of Defense (or any 
officer or employee or other persons designated by him), the Secre- 
tary of Transportation (or any officer or employee or other person 
designated by him), or the Secretary of Commerce (or any officer or 
employee or other person designated by him), as the case may be, 
furnishes the Secretary with a certification that such ownership (as 
defined by the Secretary), has terminated. 

(d) Any mortgagee under a mortgage insured under this section 
is entitled to the benefits of the insurance as provided in section 204 
(a) with respect to mortgages insured under section 203. 

(e) The provisions of subsections (b), (c), (d), (e), (f), (g), (h), 
(j), and (k)i of section 204 shall apply to mortgages insured under 
this section, except that as applied to those mortgages (1) all refer- 
ences to the "Fund," or "Mutual Mortgage Insurance Fund," shall 
refer to the General Insurance Fund, and (2) all references to "section 
203" shall refer to this section. 

(f)- The Secretary is authorized to transfer to this section the 
insurance on any mortgage covering a single-family dwelling or a one- 
family unit in a condominium project insured under this Act, if the 
mortgage indebtedness tliereof has been assumed by a serviceman who 
at the time of assumption is the owner of the property and either occu- 
pies the property or certifies that his failure to do so is the result of his 
military assignment, or, in the case of the United States Coast Guard 
or the United States National Oceanic and Atmospheric Administra- 
tion, other assignment. 

(g)^ Where a serviceman dies while on active duty in the Armed 
Forces of the United States or in the United States Coast Guard or in 
the United States National Oceanic and Atmospheric Administration, 
leaving a surviving widow as owner of the property, the period of 
ownership by the serviceman (within the meaning of subsection (c) 

«„^.^^^' 116(b). Housing Act of 1959, Public Law 86-372, approved September 23, 1959, 
73 Stat. 654, 664, inserted "(k)." 

2 Sec. 301, Housing and Urban Development Act of 1968, Public I.aw 94-448, approved 
Aug. 1. 1068, 82 Stat. 476, 50.^. added -sees. 222(f) and 222(g). 

3 Sec. 301, Housing and Urban Development Act of 1968, Public Law 90-448, approved 
August 1, 1968, 82 Stat. 476, 505, added sees. 222(f) and 222(g). 



253 



§223 NATIONAL HOUSING ACT 

of this section) shall extend for two years beyond the date of the serv- 
iceman's death or until the date the widow disposes of the property, 
whichever date occurs first. The Secretary of Defense or the Secretary 
of Transportation, or the Secretary of Commerce, as the case may be, 
shall notify such widow promptly following the serviceman's death 
of the additional costs to be borne by the mortgagor following termina- 
tion of the two year period. 

MISCELLANEOUS HOUSING INSURANCE 

Sec. 223. (a)^ Notwithstanding any of the provisions of this Act 
and without regard to limitations upon eligibility contained in any 
section or title of this Act, the Secretary is authorized, upon applica- 
tion by the mortgagee, to insure or make commitments to insure under 
any section or title of this Act any mortgage — 

(1) executed in connection with the sale by the Government, or 
any agency or official thereof, of any housing acquired or con- 
structed under Public Law 849, Seventy-sixth Congress, as 
amended; Public Law 781, Seventy-sixth Congress, as amended; 
or Public Laws 9, 73, or 353, Seventy-seventh Congress, as 
amended (including any property acquired, held, or constructed 
in connection with such housing or to serve the inhabitants there- 
of) ; or 

(2) executed in connection with the sale by the Secretary of 
Housing and Urban Development, or by any public housing 
agency with the approval of the Secretary, of any housing (in- 
cluding any property acquired, held, or constructed in connection 
with such housing or to serve the inhabitants thereof) owned or 
financially assisted pursuant to the provisions of Public Law 671, 
Seventy-sixth Congress ; or 

(3) executed in connection with the sale by the Government, 
or any agency or official thereof, of any of the so-called Greenbelt 
towns, or parts thereof, including projects, or parts thereof, 
known as Greenhills, Ohio ; Greenbelt, Maryland ; and Greendale, 
Wisconsin, developed under the Emergency Relief Appropriation 
Act of 1935, or of any of the village properties or employee's hous- 
ing under the jurisdiction of the Tennessee Valley Authority, or 
of any housing under the jurisdiction of the Department of the 

1 Sec. 223 was added by sec. 125 of the Housing Act of 1954, Public Law 560, 83d 
Congress, approved August 2, 1954, es Stat. 590. 605. Sec. 125 of the 1954 Act stated that 
this new section was added "to transfer to title II the mortgage insurance program in 
connection with the sale of certain publicly owned property as contained in section 610 
of title VI ; the insurance of mortgages to refinance existing loans insured under section 
608 of title VI and sections 903 and 908 of title IX ; and to autliorize the insurance under 
title II of mortgages assigned to the Commissioner under insurance contracts and mort- 
gages held by the Commissioner in connection with the sale of property acquired under 
insurance contracts." 

Sec. 223 was made applicable to sec. 213 (cooperative housing) by sec. 102 (k). Housing 
Amendments of 1955, Public Law 345, 84th Congress, approved August 11, 1955, 69 Stat. 
635, 636. 

Sec. 612(h)(1), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 
Stat. 149, 182, made sec. 223 applicable to sees. 220 (urban renewal housing), 221 (reloca- 
tion and low and moderate income housing), 231 (rental housing for the elderly), 232 
(nursing homes), and 233 (experimental housing). 

Sec. 114. Housing Act of 1957, Public Law 85-104, approved July 12, 1957, 71 Stat. 
294. 298, made sec. 223 applicable to sec. 222 (servicemen's housing). 

Sec. 312, Housing and Urban Development Act of 1968, Public Law 90-448, approved 
Aug. 1, 1968, 82 Stat. 476, 510 made sec. 223 applicable to any FHA insured mortgage. 



254 



NATIONAL HOUSING ACT §223 

Interior located within the town area of Coulee Dam,^ Washing- 
ton, acquired by the United States for the construction, operation, 
and maintenance of Grand Coulee Dam and its appurtenant 
works: Provided^ That for the purpose of the applicant of this 
title to sales by the Secretary of the Interior pursuant to subsec- 
tions 3(b) (1) and 3(b) (2) of the Coulee Dam Community Act of 
1957,^ the selling price of the property involved shall be deemed 
to be the appraised value, or of any permanent housing under the 
jurisdiction of the Department of the Interior constructed under 
the Boulder Canyon Project Act of December 21, 1928, as 
amended and supplemented, located within the Boulder City mu- 
nicipal area : Provided^ That for purposes of the application of 
this title to sales by the Secretarv of the Interior pursuant to sub- 
sections 3(b) (1) and 3(b) (2) of the Boulder City Act of 1958,^ 
the selling price of the property involved shall be deemed to be 
the appraised value ; or 

(4)^ executed in connection with the sale by the Government 
or any agency or official thereof, of any housing (including any 
property acquired, held, or constructed in connection therewith 
or to serve the inhabitants thereof) pursuant to the Atomic 
Energy Community Act of 1955, as amended: Provided^ That 
such insurance shall be issued without regard to any preferences 
or priorities except those prescribed by this Act or * the Atomic 
Energy Community Act of 1955, as amended ; or 

(5) executed in connection with the sale by a State or munici- 
pality, or an agency, instrumentality, or political subdivision of 
either, of a project consisting of any permanent housing (in- 
cluding any property acquired, held, or constructed in connection 
therewith or to serve the inhabitants thereof), constructed by or 
on behalf of such State, municipality, agency, instrumentality, 
or political subdivision, for the occupancy of veterans of World 
War II, or Korean veterans, their families, and others ; or 

(6) executed in connection with the first resale, within two 
years from the date of its acquisition from the Government, of 
any portion of a project or property of the character described 
in paragraphs (1), (2), (3), and (4) above; or 

(7) given to refinance an existing mortgage insured under 
this Act ^ : Provided^ That the principal amount of any such 
refinancing mortga^re shall not exceed the original prmcipal 
amount or the unexpired term of such existing mortgage and shall 
bear interest at a rate not in excess of the maximum rate pre- 



1 Mortgages covering property at Coulee Dam Inserted by sec. 4 of the Coulee Dam Com- 
munity Act of 1957, Public Law 85-240, 85th Congress, approved August 30, 1957, 71 
Stat. 425. 528. 

2 Mortgages covering property within the Boulder City municipal area inserted by sec. 12 
of the BulMer City Act of 1958, Public Law 85-900, 85th Congress, approved September 2, 
1958. 72 Stat. 1726, 1735. 

'Par. (4) added by sec. 201 of the Atomic Energy Community Act of 1955, Public Law 
221. 84th Congress, approved August 4. 1955. 69 Stat. 471. 484. 

*Sec. 114 of the Housing Act of 1957, Public Law 85-104, approved July 12, 1957, 71 
Stat. 294. 298. inserted "this Act or." 

5 Sec. 213. Housing and Urban Development Act of 1965, Public Law 89-117, approved 
August 10, 1965, 79 Stat. 451. 471, substituted "this Act" for "section 608 of title VI 
prior to the eflfective date of the Housing Act of 1954 or under section 220, 221, 903 or 
section 908." 



255 



§223 NATIONAL HOUSING ACT 

scribed under the applicable section or title of this Act, except 
that in any case involving the refinancing of a loan in which the 
Secretary 'determines that the insurance of a mortgage for an 
additional term will inure to the benefit of the applicable insur- 
ance fund, taking into consideration the outstanding insurance 
liability under the existing insured mortgage, such refinancing 
mortgage may have a term not more than twelve years in excess 
of the unexpired term of such existing insured mortgage: Pro- 
vided further^ That a mortgage of the character described in 
paragraphs (1) through (6) of this subsection shall have a ma- 
turity, a principal obligation, and an interest rate not in excess 
of the maximums prescribed under the applicable section or title 
of this Act, except that in no case may the principal obligation of 
a mortgage referred to in paragraph (5) of this subsection exceed 
90 per centum of the appraised value of the mortgaged property ; 
or 

(8)^ executed in connection with the sale by the Government of 
any housing acquired pursuant to section 1013 of the Demonstra- 
tion Cities and Metropolitan Development Act of 1966. 
(b)2 Notwithstanding any of the provisions of this title and with- 
out regard to limitations upon eligibility contained in section 221, the 
Secretary may in his discretion insure under section 221(d)(3) 
any mortgage executed by a mortgagor of the character described 
therein where such mortgage is given to refinance a mortgage covering 
an existing property or project (other than a one- to four-family 
structure) located in an urban renewal area, if the Secretary finds 
that such insurance will facilitate the occupancy of dwelling units in 
the property or project by families of low or moderate income or 
families displaced from an urban renewal area or displaced as a result 
of governmental action. 

(c)^ The Secretary shall also have authority to insure under 
this Act any mortgage assigned to him in connection with payment 
under a contract of mortgage insurance or executed in connection with 
the sale by him of any property acquired under any section or title 
of this Act without regard to any limitations or requirements con- 
tained in this Act upon the eligibility of the mortgage, upon the pay- 
ment of insurance premiums, or upon the terms and conditions of 
insurance settlement and the benefits of the insurance to be included 
in such settlement. 

(d)* With respect to any mortgage, other than a mortgage covering 
a one- to four-family structure, heretofore or hereafter insured by the 



1 Sec. 1013(h), Demonstration Cities and Metropolitan Development Act of IQ-SB, Public 
Law 89-754, approved November 3, 1966, 80 Stat. 1255, 1292, substituted this paragraph 
for "(8) executed in connection with the sale by the Commissioner of any housing acquired 
pursuant to section 108 of the Housing and Urban Development Act of 1965." This para- 
graph was originally added by sec. 108(e), Housing and Urbin Development Act of 1965, 
Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 461. 

2 Added by sec. 101(d), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 
75 Stat. 149. 154. 

8 Sec. 101(d), Housing Act of 1961. Public Law 87-70, approved June 30, 1961, 75 Stat 
149, 154, changed the designation of this subsection from (b) to (c). 

Sec. 116, Housing Act of 1964. Public Law 88-560, approved September 2. 1964, 78 Stat. 
769, 779, amended this subsection to permit the Secretary to insure mortgages financing 
the purchase of FHA-acquired property without regard to any limitations or requirements 
otherwise applicable to the insurance or payment of insurance benefits except that benefits 
must be paid in debentures. Prior to this amendment the Secretary could disregard only 
those requirements relating to the eligibility of a mortgage. 

Sec. 312 (5), Housing and Urban Development Act of 1968. Public Law 90-448. approved 
August 1. 1968, 82 Stat. 476, 510, deleted "(except that In any case the payment of insur- 
ance shall be in debentures)" at the end of this subsection. 

4 Added by Sec. 612(h)(3). Housing Act of 1961, Public Law 87-70, approved June 30, 
1961, 75 Stat. 149, 182. 

256 



NATIONAL HOUSING ACT §223 

Secretary, and notwithstanding any other provision of this Act, when 
the taxes, interest on the mortgage debt, mortgage insurance premimns, 
hazard insurance premiums, and the expense of maintenance and oper- 
ation of the project covered by such mortgage during the first two 
years following the date of completion of the project, as determined by 
the Secretary, exceed the project income, the Secretary may, in his dis- 
creation and upon such terms and conditions as he may prescribe ^ in- 
sure under the same section as the original mortgage a loan by the 
mortgagee in an amount not exceeding the excess of the foregoing ex- 
penses over the project income. Such loan shall (1) bear interest (ex- 
clusive of premium charges for insurance) at not to exceed the per 
centum per annum currently permitted for mortgages insured under 
the section under which it is to be insured, (2) be secured in such 
manner as the Secretarv shall require, and (3) be limited to a term 
not exceeding the unexpired term of the original mortgage. The Sec- 
retary is authorized to collect a premium charge for insurance of loans 
pursuant to this subsection in an amount computed at the same 
premium rate as is applicable to the original mortgage. This premium 
shall be payable in cash or in debentures of the insurance fund under 
which the loan is insured at par plus accrued interest. In the event 
of a failure of the borrower to make any payment due under such loan 
or under the original mortgage, both the loan and original mortgage 
shall be considered in default, and if such default continues for a 
period of thirty days, the lender shall be entitled to insurance bene- 
hts, computed in the same manner as for the original mortgage, ex- 
cept that in determining the interest rate under section 224 for the 
debentures representing the portion of the claim applicable to the 
loan, the date of the commitment to insure the loan and the insurance 
date of the loan shall be taken into consideration rather than the 
commitment or insurance date for the original mortgage. 

A ^ loan involving a project covered by a mortgage insured under 
section 213 that is the obligation of the Cooperative Management 
Housing Insurance Fund shall be the obligation of such fund, and 
lOnns involving projects covered by a mortgage insured under section 
236 or under any section of this title pursuant to subsection (e) of this 
section shall be the obligation of the Special Risk Insurance Fund. 

(e) ^ Notwithstanding any of the provisions of this Act except sec- 
tion 212, and without regard to limitations upon eligibility contained 
in any section of this title or title XI, the Secretary is authorized, 
upon application by the mortgagee, to insure under any section of this 
title or title XI a mortgage executed in connection with the repair, 
rehabilitation, construction, or purchase of property located in an 
older, declining urban area in which the conditions are such that one 
or more of the eligibility requirements applicable to the section or title 
under which insurance is sought could not be met, if the Secretary 
finds that (1) the area is reasonably viable, giving consideration to the 
need for providing adequate housing or group practice facilities for 
families of low and moderate income in such area, and (2) the prop- 
erty is an acceptable risk in view of such consideration. The insurance 

^ See. .''.13(b). Housing and Urban Development Act of 1968. Public Law 90-448. approved 
August 1. 1968. 82 Stat. 476. 510. amended subsection (d) to authorize insurance of a 
separate loan covering: operating losses under a multifamily mortgage during the first 2 
years. Instead of adding such excess to the amount of the original mortgage itself, as 
previously provided. ^^ ^_„ 

2 Sec. 418(c). Housing and Urban Development Act of 1969, Public Law 91-152, ap- 
proved December 24. 1969. 8.3 Stat .379. 402. inserted this section. 

^ Sec. 10.3(a). Housing and Urban Development Act of 1968. Public Law 90-448, approved 
August 1, 1968. 82 Stat. 476. 486. added subsection (e) and Sec. 418(d). Housing and Urban 
Development Act of 1969. Public Law 91-152. approved December 24. 1969. 83 Stat. 
379. 402. amended subsection (e) to provide for insurance under the Special Risk Insurance 
Fund of mortgages covering group practice facilities in older, declining urban areas. 

257 



§224 NATIONAL HOUSING ACT 

of a mortgage pursuant to tHis subsection shall be the obligation of the 
Special Kisk Insurance Fund. 

(f) Notwithstanding any of the provisions of this Act, the Secre- 
tary is authorized, in his discretion, to insure under any section of this 
title a mortgage executed in connection with the purchase or refi- 
nancing of an existing multifamily housing project or the refinancing 
of existing debt of an existing- hospital/ In the case of refinancing 
under this subsection of multifamily housing project ^ located in an 
older, declmmg urban area, the Secretary shall prescribe such terms 
and conditions as he deems necessary to assure that — 

(1) the refinancing is used to lower the monthly debt service 
only to the extent necessary to assure the continued economic via- 
bility of the project, taking into account any rent reductions to be 
implemented by the mortgagor ; and 

(2) during the mortgage term no rental increases shall be 
Tiiade except those which are necessary to offset actual and reason- 
able operating expense increases or other necessary expense in- 
creases approved by the Secretary. 

In the case of refinancing of an existing hospital the Secretary shall 
prescribe such terms and conditions as the Secretary deems necessary 
to assure that — 

(A) the refinancing is employed to lower the monthly debt 
service costs (taking into account any fees or charges connected 
with such refinancing) of such existing hospital ; 

(B) the proceeds of any refinancing will be employed only to 
retire the existing indebtedness and pay the necessary cost of 
refinancing on such existing hospital ; 

(C) such existing hospital is economically viable; and 

(D) such existing hospital has received such certifications from 
a State agency designated in accordance with section 604(a) (1) 
or section 1521 of the Public Health Service Act for the State 
in which the hospital is located as the Secretary deems necessary 
and appropriate and comparable to the certification required for 
hospitals insured under section 242 of this Act and that such State 
agency additionally certify that the services being provided by 
such existing hospital at the time of refinancing are appropriate 
as determined pursuant to section 1528(a) (6) of the Public Health 
Service Act.^ 

(g) Notwithstanding any other provisions of this Act, the Secre- 
tary may, in his discretion, insure a mortgage covering a multifamily 
housing project including units which are not self-contained.* 

DEBENTURE INTEREST RATE 

Sec. 224.^ Notwithstanding any other provisions of this Act, deben- 
tures issued under any section of this Act with respect to a loan or 

1 Amended of Sec. 326, Housing and Community Development Amendments of 1978. 
P.L. 95-557, 92 Stat. 2080, approved October 31. 1978. 

* Sec. 811(a) of the Housing and Community Development Act of 1974. Public Law 
93-383, 88 Stat. 633, approved August 22, 1975, amended Sec. 223 of the National Housing 
Act by 'adding new sections (f) and (g). 

' Sec 224 was added by sec. 126 of the Housing Act of 1954, Public Law 560, 83d 
Congress, approved August 2, 1054, 68 Stat. 590, 60G, but sec. 612 (i), Housing Act of 
1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149. 182, amended the first 
sentence to read as set forth in the text. Immediately prior to amendment by sec. 612(1), 
Housing Act of 1961, the first sentence read as follows : 

"Notwithstanding any other provisions of this Act, debentures issued under any section 
of this Act with respect to a mortgage accepted for insurance on or after thirty days 
following the effective date of the Housing Act of 1954 (except debentures issued pursuant 
to paragraph (8) of section 221(g) hereof) shall bear interest at the rate in effect at the 
time the mortgage is insured." 

258 



NATIONAL HOUSING ACT §225 

mortgage accepted for insurance on or after thirty days following 
the effective date of the Housing Act of 1954 (except debentures issued 
pursuant to paragraph (4) of section 221(g)) shall bear interest at 
the rate in effect on the date the commitment to insure the loan or 
mortgage was issued, or the date the loan or mortgage was endorsed 
for insurance, or (when there are two or more insurance endorse- 
ments) the date the loan or mortgage was initially endorsed for in- 
surance, whichever rate is the highest, except that debentures issued 
pursuant to section 220(f), section 220(h)(7), section 221(g), sec- 
tion 233, or section 238 ^ may, at the discretion of the Secretary, bear 
interest at the rate in effect on the date they are issued. 

The Secretary shall from time to time, with the approval of the 
Secretary of the Treasury, establish such interest rate in an amount 
not in excess of the annual rate of interest determined by the Secretary 
of the Treasury, at the request of the Secretary, by estimating the 
average yield to maturity, on the basis of daily closing market bid 
quotations or prices during the calendar month next preceding the 
establishment of such rate of interest, on all outstanding marketable 
obligations of the United States having a maturity date of fifteen 
years or more from the first day of such next preceding month, and by 
adjusting such estimated average annual yield to the nearest one- 
eighth of 1 per centum. 

OPEN-END MORTGAGES 

Sec. 225.^ Notwithstanding any other provisions of this Act, in con- 
nection with any mortgage insured pursuant to any section of this Act 
which covers a property upon which there is located a dwelling de- 
signed principally for residential use for not more than four families 
in the aggregate, the Secretary is authorized upon such terms and 
conditions as he may prescribe, to insure under said section the amount 
of any advance for the improvement or repair of such property made 
to the mortgagor pursuant to an "open-end" provision in the mortgage, 
and to add the amount of such advance to the original principal obliga- 
tion in determining the value of the mortgage for the purpose of com- 
puting the amounts of debentures and certificate of claim to which the 
mortgagee may be entitled: Provided, That the Secretary may re- 
quire the payment of such charges, including charges in lieu of insur- 
ance premiums, as he may consider appropriate for the insurance of 
such "open-end" advances : Provided further^ That only advances for 
such improvements or repairs as substantially protect or improve the 
basic livability or utility of the property involved shall be eligible for 
insurance under this section : Provided further^ That no such advance 
shall be insured under this section if the amount thereof plus the 
amount of the unpaid balance of the original principal obligation of 
the mortgage would exceed the amount of such original principal obli- 
gation unless the mortgagor certifies that the proceeds of such advance 
will be used to finance the construction of additional rooms or other 
enclosed space as a part of the dwelling : And provided further. That 
the insurance of "open-end" advances shall not be taken into account 
in determining the aggregate amount of principal obligations of mort- 
gages which may be insured under this Act. 

^ Sec. 104(b). Housing and Urban Development Act of 1968, Public Law 90-448, approved 
August 1. 1968, 82 Stat. 476. 488, inserted "section 238". 

* Sec. 225 was added bv sec. 126 of the Housing Act of 1954, Public Law 560, 83d 
Congress, approved August 2.1954, 68 Stat. 590. 607. 

259 



§226 NATIONAL HOUSING ACT 

APPRAISAL AVAILABLE TO HOME BUYERS 

Sec. 226.^ The Secretary is hereby authorized and directed to 
require that, in connection with any property upon which there is 
located a dwelling designed principally for a single-family residence 
or a two-f amil;^ residence and which is approved for mortgage insur- 
ance under section 203, 213 with respect to any property or project of a 
corporation or trust of the character described in paragraph num- 
bered (2) of subsection (a) thereof, 220, 221, 222, 233,^ 234,^ 235 (i),* 
237,* or 903, of this Act, the seller or builder or such other person as 
may be designated by the Secretary shall agree to deliver, prior to the 
sale of the property, to the person purchasing such dwelling for his 
own occupancy, a written statement setting forth the amount of the 
appraised value of the property as determined by the Secretary. This 
section shall not apply in any case where the mortgage involved was 
insured or the commitment for such insurance was issued prior to the 
effective date of the Housing Act of 1954. Notwithstanding ® the first 
sentence of this section, the Secretary is authorized to require, in con- 
nection with any mortgage where the mortgage amoimt is computed on 
the basis of the Secretary's estimate of the replacement cost of the 
property, or on the basis of any other estimates of the Secretary, that 
a written statement setting forth such estimate or estimates, as the 
cases may be, be furnished under this section in lieu of a written state- 
ment setting forth the amount of the appraised value of the property. 



Sec. 227.^ Notwithstanding any other provision of this Act. no 
mortgage covering new or rehabilitated multifamily housing or a 
property or project described in title XI shall be insured under this 
Act unless the mortgagor has agreed ^ (a) to certify, upon completion 
of the physical improvements on the mortgaged property or proj- 
ect and prior to final endorsement of the mortgage, either (i) that 
the approved percentage of actual cost (as those terms are herein- 

iSec. 226 was added by sec. 126 of the Housing Act of 1954, Public Law 560, 83d 
Congress, approved August 2, 1954, 68 Stat. 590. 607. 

2 Sec. 233 (experimental housing mortgage insurance) added by sec. 103, Housing Act 
of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 158. 

3 Sec. 234 (mortgage insurance for individually owned units in multifamily structures) 
added by sec. 104, Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 
Stat. 149, 160. 

* Sec. 235 (interest payment program for homeownershlp), and sec. 237 (mortgage in- 
surance for low income families with irregular credit histories and income patterns) were 
Inserted by sec. 102(b), Housing and Urban Development Act of 1968, Public Law 90-448, 
approved August 1, 1968, 82 Stat. 476, 486. 

6 This sentence added by sec. 115 of the Housing Act of 1957, Public Law 85-104, ap- 
proved July 12, 1957, 71 Stat. 294, 298 and amended by sec. 612(J)(2), Housing Act of 
1961, Public Law 87-70. approved June 30, 1961. 75 Stat. 149, 182, to include estimates 
other than the estimate of the replacement cost of the property. 

8 Sec. 227 was added by sec. 126 of the Housing Act of 1954, Public Law 560, 83d Con- 
gress, approved August 2, 1954, 68 Stat. 590. 607. Sec. 502(b), Demonstration Cities and 
Metropolitan Development Act of 1966. Public Law 89-754. approved November 3, 1966, 
80 Stat. 1255, 1277, Inserted in the first sentence following "multifamily housing" the 
words "or a property or project described in title XI", thus requiring cost certification in 
the case of group practice facilities financed under the progam authorizing mortgage insur- 
ance for such facilities. 

■^ See also sec. 814 of the Housing Act of 1954, which provides that no mortgage covering 
new or rehabilitated multifamily housing as defined in sec. 227 of the National Housing 
Act shall be insured unless the mortgagor certifies that he will keep such records as are 
prescribed by FHA and that they will be kept in such form as to permit a speedy and 
effective audit. 



260 



NATIONAL HOUSING ACT §227 

defined) equaled or exceeded the proceeds of the mortgage loan or 
(ii) the amount by which the proceeds of the mortgage loan exceeded 
such approved percentage of actual cost, as the case may be, and (b) 
to pay forthwith to the mortgagee, for application to the reduction of 
the principal obligation of such mortgage, the amount, if any, certi- 
fied to be in excess of such approved percentage of actual cost. Upon 
the Secretary's approval of the mortgagor's certification as required 
hereunder, such certification shall be final and incontestable, except 
for fraud or material misrepresentation on the part of the mortgagor. 
As used in this section — 

(a) The term "new or rehabilitated multifamily housing" means 
a project or property approved for mortgage insurance prior to the 
construction or the repair and rehabilitation involved and covered by 
a mortgage insured or to be insured (i) under section 207, (ii) under 
section 213 with respect to any property or project of a corporation 
or trust of the character described in paragraph numbered (1) of sub- 
section (a) thereof or with respect to any property or project of a 
mortgagor of the character described in paragraph (3) of subsection 
(a) thereof, (iii) under section 220 if the mortgage meets the require- 
ments of paragraph (3) (B) of subsection (d) thereof, (iv)^ under 
section 221 if the mortgage meets the requirements of paragraph (3) 
or paragraph (4) of subsection (d) thereof, (v) under section 231, 
(vi)2 under section 233 if the mortgage meets the requirements of sub- 
section (b) , ( vii) under section 810 if the mortgage meets the require- 
ments of subsection (f), (viii)^ under section 234(d), or (ix) under 
section 236 * ; 

(b) The term "approved percentage" means the percentage figure 
which, under applicable provisions of this Act, the Secretary is au- 
thorized to apply to his estimate of value, cost,^ or replacement cost, 
as the case may be, of the property or project in determining the maxi- 
mum insurable mortgage amount; ^ except that if the mortgage is to 
assist the financing of repair or rehabilitation and no part of the pro- 
ceeds will be used to finance the purchase of the land or structure in- 
volved, the approved percentage shall be 100 per centum; and 

(c) The term "actual cost" has the following meaning: (i) in case 
the mortgage is to assist the financing of new construction, the term 
means the actual cost to the mortgagor of such construction, including 
amounts paid for labor, materials, construction contracts, off-site pub- 
lic utilities, streets, organizational and legal expenses, such allocations 
of general overhead items as are acceptable to the Secretary, and 

1 Immediately prior to amendment by sec. 112(a). Housing Act of 1959, Public Law 86- 
372, approved September 23, 1959, 73 Stat. 654, 661, clauses (iv), (v), and (vi) read as 
follows : 

"(iv) under section 221 If the mortgage meets the requirements of paragraph (3) or 
subsection (d) thereof, (v) under section 803, or (vi) under sections 903 and 908' . 

2Tmmediatelv prior to amendment bv sec. 612(k)(l), Housing Act of 1961, Public Law 
87-70, approved June 30, 1961, 75 Stat. 149, 183, clause (vi) read as follows: "or (vi) 
under section 810 if the mortgage meets the requirements of subsection (f) ;". 

3 Sec. 110(c), Housing Act of 1964. Public Law 88-560, approved September 2, 1964, 78 
Stat. 769. 782 inserted ", or (viii) under section 234(d)". , ^^ ^^„ 

*Sec. 201(b)(2), Housing and Urban Development Act of 1968, Public Law 90-448, 
approved August 1, 1968, 82 Stat. 476. 502, inserted "(ix) under section 236". 

5 Sec. 612(k)(2), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 
«tat. 149, 183, inserted "cost". ^ ^ „^^^ ^ 

« This clause added bv sec. 109, Housing Act of 1956, Public Law 1020, 84th Congress, 
approved August 7. 1956, 70 Stat. 1091, 1095. 



261 



§227 NATIONAL HOUSING ACT 

other items of expense approved by the Secretary, plus (1) a rea- 
sonable allowance for builder's profit if the mortgagor is also the 
builder as defined by the Secretary, and (2) an amount equal to the 
Secretary's estimate of the fair market value of any land (prior to 
the construction of the improvements built as a part of the project) 
in the property or project owned by the mortgagor in fee (or, in 
case the land in the property or project is held by the mortgagor un- 
der a leasehold or other interest less than a fee, such amount as the 
mortgagor paid for the acquisition of such leasehold or other interest 
but, in no event, in excess of the fair market value of such leasehold or 
other interest exclusive of the proposed improvements), but exclud- 
ing the amount of any kickbacks, rebates, or trade discounts received 
in connection with the construction of the improvements, or (ii) in 
case the mortgage is to assist the financing of repair or rehabilitation, 
the te7*m means the actual cost to the mortgagor of such repair or 
rehabilitation, including the amounts paid for labor, materials, con- 
struction contracts, off-site public utilities, streets, organization and 
legal expenses, such allocations of general overhead items as are ac- 
ceptable to the Secretary, and other items of expense approved by 
the Secretary, plus (1) a reasonable allowance for builder's profit 
if the mortgagor is also the builder as defined by the Secretary, and 
(2) an additional amount equal to (A) in case the land and improve- 
ments are to be acquired by the mortgagor and the purchase price 
thereof is to be financed with part of the proceeds of the mortgage, 
the purchase price of such land and improvements prior to such re- 
pair or rehabilitation, or (B) in case the land and improvements are 
owned by the mortgagor subject to an outstanding indebtedness to be 
refinanced with part of the proceeds of the mortgage, the amount of 
such outstanding indebtedness secured by such land and improve- 
ments, but excluding (for the purpose of this clause (ii) ) the amount 
of any kickbacks, rebates, or trade discounts received in connection 
with the construction of the improvements : Provided^ That such addi- 
tional amount under (A) of this clause (ii) shall in no event exceed 
the Secretary's estimate of the fair market value of such land and im- 
provements prior to such repair or rehabilitation, and such additional 
amount under (B) of this clause (ii) shall in no event exceed the 
approved percentage of the Secretary's estimate of the fair market 
value of such land and improvements prior to such repair or rehabili- 
tation. In the case of a mortgage insured under section 220, section 221 
(d) (3),i section 221(d) (4), section 231, section 233, or section 236 ^ 
where the mortgagor is also the builder as defined by the Secretary, 
there shall be included in the actual cost, in lieu of the allowance for 
builder's profit under clause (i) or (ii) of the preceding sentence, 
an allowance for builder's and sponsor's profit and risk of 10 per 
centum (unless the Secretary, after finding that such allowance is 
unreasonable, shall by regulation prescribe a lesser percentage) of all 
other items entering into the term "actual cost" except land or amounts 
paid for a leasehold and amounts included under either (A) or (B) 
of clause (ii) of the preceding sentence. In the case of a mortgage 

iSec. 612(k)(3), Housing Act of 1961. Public Law 87-70, approved June 30. 1961, 75 
Stat. 149, 188, amended this sentence to include mortgages insured under sees. 221(d)(3) 
and 233(b)(2) in addition to mortgages insured under sees. 220, 221(d)(4), and 231. 

2 Sec. 201(b)(3), Housing and Urban Development Act of 1968. Public Law 90-448, 
approved August 1, 1968, 82 Stat. 476, 502, added "section 236". 



262 



NATIONAL HOUSING ACT §229 

insured under section 220, section 221(d) (3),^ section 221(d)(4), 
section 231. or section 233. or section 236.^ where the mortgagor is not 
also the builder as defined by the Secretary, there shall be included in 
the actual cost an allowance for sponsor's profit and risk of the said 
10 per centum or lesser percentage of all other items entering into the 
term "actual cost" except land or amounts paid for a leasehold, 
amounts included under either (A) or (B) of the said clause (ii),and 
amounts paid by the mortgagor under a general construction contract. 
Sec. 228. Repealed.^ 

VOLUNTARY TERMINATION OF INSURAXCE 

Sec. 229.* Notwithstanding any other provision of this Act and 
with respect to any loan or mortgage heretofore or hereafter insured 
under this Act, except under section 2, the Secretary is authorized to 
terminate any insurance contract upon request by the borrower or 
mortgagor and the financial institution or mortgagee and upon pay- 
ment of such termination charge as the Secretary determines to be 
equitable, taking into consideration the necessity of protecting the 
various insurance Funds. Upon such termination, borrowers and 
mortgagors and financial institutions and mortgagees shall be entitled 
to the rights, if any, to which they would be entitled imder this Act 
if the insurance contract were terminated by payment in full of the 
insured loan or mortgage. 

ACQUISITION OF MORTGAGES TO AVOID FORECLOSURE 

Sec. 230.' Upon receiving notice of the default of any mortgage 
covering a one-, two-, three-, or four-family residence heretofore or 
hereafter insured imder this Act, the Secretary, in his discretion and 
for the purpose of avoiding foreclosure of the mortgage, and not- 
withstandinor the fact that he has previously approved a request of the 
mortgagee for an extension of the time for curing the default and of 
the time for commencing foreclosure proceedings or for otherwise ac- 
quiring title to the mortgaged property, or has approved a modification 
of the mortgage for the purpose of changing the amortization provi- 
sions by recasting the unpaid balance, may acquire the loan and secu- 

iSec. 612(k)(3), Housing Act of 1961. Public Law 87-70, approved June 30. 1961. 75 
Stat. 149. 183. amended this sentence to Include mortgages insured under sees. 221(d)(3) 
and 233(bl(2) In addition to mortsapres insured under sees. 220. 221(d)(4), and 231. 

2 Sec. 201(b)(3), Housing and Urban Development Act of 1968, Public Law 90-448, 
approved August 1. 196S. 82 Stat. 476, 502. inserted "section 236". 

•Repealed by sec. 12(c), Public Law 94, 84th Congress, approved June 28. 1955, 69 
Stat. 172. 182. 

*Immedlatelv prior to amendment by sec. 612(1), Housing Act of 1961, Public Law 
87-70. approved June 30. 1961, 75 Stat 149. 183. section 229 read as follows : 

"Sec. 229. Notwithstanding any other provision of this Act and with respect to any 
mortgace covering a one-, two-, three-, or four-family residence heretofore or hereafter 
Insured under this Act. the Commissioner Is authorized to terminate any mortgage insur- 
ance contract upon request by the mortgagor and mortgagee and upon payment of such 
termination charge as the Commissioner determines to be equitable, taking into considera- 
tion the necessitv of protecting the various Insurance funds. Upon such termination 
mort^aeors and mortgagees shall be entitled to the rights, if any. to which they would be 
entitled under this Act if the Insurance contract were terminated by payment in full of 
the insured mortgage." „ ^«-rv 

5 Sec. 114(a), Housing Act of 1959, Public Law 86-372, approved September 23, 19o9, 
73 Stat. 654. 662. added sec. 2,30. ,^ „ ,^^. 

Sec. 104(b). Housing Act of 1964. Public Law 88-560, approved September 2, 1964, 
78 Stat. 79, 769. 770, amended the first sentence of sec. 230 to make it clear that the 
Secretary can accept assignment of a mortgage in default even though the lender had 
previously granted forbearance relief to the mortgagor. In addition, the payment of in- 
surance benefits to the lender in such cases mav include not only the unpaid interest on 
the mortgage but also such costs and attorneys' fees as are properly incurred by the lender 
In making the assignment. 

263 



§ 231 NATIONAL HOUSING ACT 

Tity therefor upon payment of the insurance benefits in an amount 
equal to the unpaid principal balance of the loan plus any unpaid 
mortgage interest plus reimbursement for such costs and attorney's 
fees as the Secretary finds were properly incurred in connection with 
tlie defaulted mortgage and its assignment to the Secretary, and 
for any proper advances theretofore made by the mortgagee under the 
provisions of the mortgage. After the acquisition of such mortgage 
by the Secretary, the mortgagee shall have no further rights, lia- 
bilities, or obligations with respect thereto. The provisions of sec- 
tion 204 relating to the issuance of debentures incident to the acquisi- 
tion of foreclosed properties shall apply with respect to debentures 
issued under this subsection, and the provisions of section 204 relating 
to the rights, liabilities, and obligations of a mortgagee shall apply 
with respect to the Secretary when he has acquired an insured mort- 
gage under this section, in accordance with and subject to regulations 
(modifying such provisions to the extent necessary to render their 
application for such purpose appropriate and effective) which shall 
be prescribed by the Secretary. 

HOUSING FOR ELDERLY PERSONS 

Sec. 231.^ (a) The purpose of this section is to assist in relieving 
the shortage of housing for elderly persons and to increase the supply 
of rental housing for elderly persons. 

For the purposes of this section — 

(1) the term "housing" means eight or more new or rehabilitated 
living units, not less than 50 per centum of which are specially 
designated for the use and occupancy of elderly persons ; 

(2) the term "elderly person" means any person, married or 
single, who is sixty-two years of age or over ; and 

(3) the terms "mortgage," "mortgagee," "mortgagor," and "ma- 
turity date" shall have the meanings respectively set forth in sec- 
tion 207 of this Act. 

(b) The Secretary is authorized to insure any mortgage (includ- 
ing advances on mortgages during construction) in accordance with 
the provisions of this section upon such terms and conditions as he may 
prescribe and to make commitments for insurance of such mortgages 
prior to the date of their execution or disbursement thereon. 

(c) To be eligible for insurance under this section, a mortgage to 
provide housing for elderly persons shall — 

(2) 2 not to exceed, for such part of the property or project as 
may be attributable to dwelling use (excluding exterior land im- 



1 Sec. 201(a), Housing Act of 1959, Public Law 86-372, approved September 23, 1959, 
73 Stat. 654, 665, added sec. 231. 

See also provisions for rent supplements, sec. 101 (j). Housing and Urban Development 
Act of 1965, and interest reduction payments for rental housing. 

2 Sec. 304(f) of Housing and Community Development Act of 1974, Public Law 93-383, 
88 Stat. 633, approved August 22, 1974, struck para. (1) of section 231(c) of the National 
Housing Act, but did not renumber the following paragraphs. 

3 Sec. 107(e), Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 
78 Stat. 769, 776, deleted the previous per room limits in this par. (c) (2) on the amount 
of a mortgage and substituted dollar amount limitations based on the number of family 
units in the project with the dollar amount limitations varying according to the number 
of bedrooms in each unit. 

Sec. 113(g), Housing and Urban Development Act of 1969, Public Law 91-152, approved 
December 24, 1969, 83 Stat. 379, 384, increased by ten percent as shown in the text the 
dollar limits in this par. (c) (2). 



264 



NATIONAL HOUSING ACT §231 

provement as defined by the Secretary), $18,450 ^ per family unit 
without a bedroom, $20,625 ^ per family unit with one bedroom, 
$24,630 ^ per family unit with two bedrooms, $29,640 ^ per family 
unit with three bedrooms, and $34,846 ^ per family unit with 
four or more bedrooms; except that as to projects to consist of 
elevator-type structures the Secretary may, in his discretion, 
increase the dollar amount limitations per family unit to not to 
exceed $20,902 ^ per family unit without a bedroom, $24,030 ^ per 
family unit with one bedroom, $29,220 ^ per family unit with two 
bedrooms, $37,800 ^ per family unit with three bedrooms, and 
$41,494 2 per fam.ily unit with four or more bedrooms, as the case 
may be, to compensate for the higher costs incident to the construc- 
tion of elevator- type structures of sound standards of construction 
and design ; and except that the Secretary may, by regulation, in- 
crease any of the foregoing dollar amount limitations contained in 
this paragraph by not to exceed 50 per centum in any geograph- 
ical area ^ w^iere he finds that cost levels so require ; 

(3) if executed by a mortgagor which is a public instrumen- 
tality or a private nonprofit corporation or association or other 
acceptable private nonprofit organization regulated or supervised 
under Federal or State laws or by political subdivisions of States, 
or agencies thereof, or by the Secretary under a regulatory 
agreement or otherwise, as to rents, charges, and methods of oper- 
ation, in such form and in such manner as, in the opinion of the 
Secretary, will effectuate the purpose of this section, involve 
a principal obligation not in excess of the amount which the Sec- 
retary estimates will be the replacement cost of the property or 
project when the proposed improvements are completed (the re- 
placement cost may include the land, the proposed physical im- 
provements, utilities within the boundaries of the land, architect's 
fees, taxes, interest during construction, and other miscellaneous 
charges incident to construction and approved by the Secre- 
tary) : Provided^ That in the case of properties other than new 
construction, the principal obligation shall not exceed the ap- 
praised value rather than the Secretary's estimate of the replace- 
ment cost ; 

(4) if executed by a mortgagor which is approved by the Sec- 
retary but is not a public instrumentality or a private nonprofit 
organization, involve a principal obligation not in excess (in the 
case of a property or project approved for mortgage insurance 
prior to the beginning of construction) of 90 per centum of the 



1 Sec. 303(f)(1) of Housing and Community Development Act of 1974, Public Law 
93-383, 88 Stat. 633, approved August 22, 1974, substituted "$12,300" for "$8,800", 
"$17,188" for "$12,375", "$20,525" for "S14.850", ".$24,700" for "$18,700". and "$29,038" 
for $25,025". Sec. 8(b)(6)(A) of the Housing Authorization Act of 1976, Public Law 
94-375, approved August 3, 1976, 90 Stat. 1067, amended section 231 (c)(2) of the 
National Housing Act by substituting "$18,450" for "$12,300", "$20,625" for "$17,188", 
"$24,630" for "$20,525", "$29,630" for "$24,700", and "$34,846" for "$29,038". 

2 Sec. 303(f)(2) of Housing and Communitv Development Act of 1974, Public Law 
93-383. 88 Stat. 633, approved August 22, 1974, substituted "$13,975" for "$10,450". 
"$20,025" for "$14,850", "i«24.350" for "$17,600", "$31,500" for "$22,000". and "$34,578" 
for "$25,025". Sec. 8(b)(6)(B) of the Housing Authorization Act of 1973, Public Law 
94-375, approved August 3. 1976. 90 Stat. 1067, further amended section 231(c)(2) of 
the National Housing Act by substituting "$20,962" for "$13,975". "$24,030" for "$20,- 
025", "$29,220" for "$24,350", "$37,800 for "$31,500", and "$41,494" for "$34,578". 

3 Sec. 3 of Public Law 94-173, 89 Stat. 1027, approved December 2'3, 1975, amended 
sec. 231(c)(2) of the National Housing Act by deleting the words "by not to exceed 
45 per centum in any geographical area" and inserting the words "by not to exceed 75 
per centum in any geographical area". Sec. 8(a) of the Housing Authorization Act of 
1976, Public Law 94-375, approved August 3, 1976, 90 Stat. 1067, amended section 
231(c)(2) of the National Housing Act bv strildng "by not to exceed 75 per centum in 
any geographical area" and Inserting In lieu thereof "by not to exceed 50 per centum- 
In any geographical area". 

265 



• 231 NATIONAL HOUSING ACT 

amount which the Secretary estimates will be the replacement cost 
of the property or project when the proposed improvements are 
completed (the replacement costs may include the land, the pro- 
posed physical improvements, utilities within the boundaries of 
the land, architect's fees, taxes, interest during construction, and 
other miscellaneous charges incident to construction and approved 
by the Secretary, and shall include an allowance for builder's and 
sponsor's profit and risk of 10 per centum of all of the foregoing 
items except the land unless the Secretary, after certification that 
such allowance is unreasonable, shall by regulation prescribe a 
lesser percentage) : Provided^ That in the case of properties other 
than new construction the principal obligation shall not exceed 90 
per centum of the Secretary's estimate of the value of the property 
or project: And provided further^ That the Secretary may in his 
discretion require such mortgagor to be regulated or restricted as 
to rents or sales, charges, capital structure, rate of return, and 
methods of operation, and for such purpose the Secretary may 
make contracts with and acquire for not to exceed $100 such stock 
or interest in any such mortgagor as the Secretary may deem nec- 
essary to render effective such restrictions or regulations; such 
stock or interest shall be paid for out of the General Insurance 
Fund and shall be redeemed by the mortgagor at par upon 
the termination of all obligations of the Secretary under the 
insurance; 

(5) provide for a complete amortization by periodic payments 
within such terms as the Secretary shall prescribe ; 

(6) bear interest (exclusive of premium charges for insurance) 
at not to exceed 5 per centum per annum on the amount of the 
principal obligation outstanding at any time, or not to exceed such 
per centum per annum not in excess of 6 ^ per centum as the 
Secretary finds necessary to meet the mortgage market; and 

(7) cover a property or project which is approved for mort- 
gage insurance prior to the beginning of construction or rehabili- 
tation, with 50 per centum or more of the units therein specially 
designed for the use and occupancy of elderly persons in accord- 
ance with standards established by the Secretary and which may 
include such commercial and special facilities as the Secretary 
deems adequate to serve the occupants. 

(d) The Secretary may consent to the release of a part or parts 
of the mortgaged property or project from the lien of any mortgage 
insured under this section upon such terms and conditions as he may 
prescribe, and shall prescribe such procedures as in his judgment are 
necessary to secure to elderly persons a preference or priority of op- 
portunity to rent the dwellings included in such property or project. 

(e) The provisions of subsections (d), (e), (g), (h), (i), (j), (k), 
(1), and (n) of section 207 shall apply to mortgages insured under 
this section and all references therein to section 207 shall refer to this 
section. 

(f) 2 Notwithstanding any of the provisions of this section, the 
housing provided under this section may include family units which 

iSec. 3(c), Public Law 90-301, approved May 7, 1968, 82 Stat. 113, 114, substituted 
the 6 per centum maximum for the 5% per centum maximum. 

2 Added by sec. 203(c), Housing Act of 1964, Public Law 88-560, approved Septem- 
ber 2, 1964, 78 Stat. 769, 784. 



266 



NATIONAL HOUSING ACT 



§232 



are specially designed for the use and occupancy of any person or 
family qualifying as a handicapped family as defined in section 902 
of the Housing Act of 1959, and such special facilities as the Secretary 
deems adequate to serve handicapped families (as so defined) The 
Secretary may also prescribe procedures to secure to such families 
preference or priority of opportunity to rent the living units specially 
designed lor their use and occupancy. 

MORTGAGE INSURANCE FOR NURSING HOMES 

Sec. 232.^ (a) The purpose of this section is to assist in the provision 
of facilities for either of the following purposes or for a combination 
of such purposes : 

(1) The development of nursing homes for the care and treat- 
ment of convalescents and other persons who are not acutely ill 
and do not need hospital care but who require skilled nursing care 
and related medical services, including additional facilities for 
the nonresident care of elderly individuals and others who are 
able to live inde]:)endently but who require care during the day.- 

(2) The development of intermediate care facilities for the care 
of persons who, while not in need of nursing home care and treat- 
ment, nevertheless are unable to live fully independently and who 
are in need of minimum but continuous care provided by licensed 
or trained personnel, including additional facilities for the non- 
resident care of elderly individuals and others who are able to 
live independently but who require care during the day.^ 

(b) For the purposes of this section — 

(1) The term "nursing home" means a proprietary facility, or 
facility of a private noii})rofit corporation or association,"* 
licensed or regulated by the State (or, if there is no State law pro- 
viding for such licensing and regulation by the State, by the 
municipality or other political subdivision in which the facility is 
located), for the accommodation of convalescents or other per- 
sons who are not acutely ill and not in need of hospital care but 
who require skilled nursing care and related medical services, in 
which such nursing care and medical services are prescribed by, 
or are performed under the general direction of, persons licensed 
to provide such care or services in accordance with the laws of the 
State where the facility is located ; 

(2) the term "intermediate care facility" means a proprietary 
facility or facility of a private nonprofit corporation or associa- 
tion licensed or regulated by the State (or, if there is no State law 
providing for such licensing and regulation by the State, by the 
municipality or other political subdivision in which the facility is 
located) for the accommodation of persons who, because of 
incapacitating infirmities, require minimum but continuous care 
but are not in need of continuous medical or nursing services; 



1 Sec. 111. Hoiislnp: and Urban Development Act of 1969. Public Law 91-152, approved 
December 24. 1060. 83 Stat. 370. :',82. amended section 232 to expand the nursing- home 
procram to cover mortpajres financing: new or rehabilitated intermediate care facilities or 
combined ntirsinc: homes and intermediate care facilities. Section 232 was originally added 
by sec. 115. Tlousing Act of 1959. Public Law 86-372, approved September 23, 1950. 73 
Stat. 654. 663. 

2 Amended b.v Sec. 312(a) Housing and Community Development Amendments of 1978: 
Pui)lic Law 95-557. 92 Stat. 2080. approved October 31, 1978. 

'1(1. 

* The phrase "or facility of a private nonprofit corporation or association" added by 
?pq V^' ^^''"^'"^ ^'^^^ °^ ^^^•*' Public Law 88-560, approved September 2, 1964, 78 Stat. 



267 



§232 NATIONAL HOUSING ACT 

(3)^ "a nursing home" or "intermediate care facility" may in- 
clude such additional facilities as may be authorized by the Sec- 
retary for the nonresident care of elderly individuals and others 
who are able to live independently but who require care during the 
day ; and ^ the term "mortgage" means a first mortgage on real es- 
tate in fee simple, or on the interest of either the lessor or lessee 
thereof of (A) under a lease for not less than ninety-nine years 
which is renewable, or (B) under a lease having a period of not less 
than fifty years to run from the date the mortgage was executed. 
The term "first mortgage" means such classes of first liens as are 
commonly given to secure advances (including but not limited to 
advances during construction) on, or the unpaid purchase price 
of, real estate under the laAvs of the State in which the real estate 
is located, together with the credit instrument or instruments, if. 
any, secured thereby, and any mortgage may be in the form of one 
or more trust mortgages or mortgage indentures or deeds of trust, 
securing notes, bonds, or other credit instruments, and, by the 
same instrument or by a separate instrument, may create a secu- 
rity interest in initial equipment, whether or not attached to the 
realty. The term "mortgagor" shall have the meaning set forth in 
section 207(a) of this Act. 
(c) The Secretary is authorized to insure any mortgage (includ- 
ing advances on such mortgages during construction) in accordance 
with the provisions of this section upon such terms and condi- 
tions as he may prescribe and to make commitments for insurance 
of such mortgage prior to the date of its execution or disbursement 
thereon. 

(d)^ In order to carry out the purposes of this section, the Secre- 
tary is authorized to insure any mortgage which covers a new or re- 
habilitated nursing home or intermediate care facility or combined 
nursing home and intermediate care facility including equipment to 
be used in its operation, subject to the following conditions : 

(1) The mortgage shall be executed by a mortgagor approved 
by the Secretary. The Secretary may in his discretion require 
any such mortgagor to be regulated or restricted as to charges 
and methods of financing, and, in addition thereto, if the mort- 
gagor is a corporate entity, as to capital structure and rate of re- 
turn. As an aid to the regulation or restriction of any mortgagor 
with respect to any of the foregoing matters, the Secretary may 
make such contracts with and acquire for not to exceed $100 
such stock or interest in such mortgagor as he may deem neces- 
sary. Any stock or interest so purchased shall be paid for out of 
the General Insurance Fund, and shall be redeemed by the mort- 
gagor at par upon the termination of all obligations of the Secre- 
tary under the insurance. 

(2) The mortgage shall involve a principal obligation in an ' 
amount not to exceed 90 ^ per centum of the estimated value of 

1 Added by sec. 312(b). Housing and Community Development Amendments of 1978. 
Public Law 95-557, 92 Stat. 2080, approved October 31, 1978. 

2 Immediately prior to amendment by sec. 314(1). Housing' and Urban Develooment Aft 
of 1968, Public Law 90-448, approved August 1, 1968, 82 Stat. 476. 511, subsection (b) (2) 
read as follows : 

"(2> The terms 'mortgage' and 'mortgagor' shall have the meanings respectively set 
forth in section 207(a) of this Act." 

^ Section 314(2) of the Housing and Urban Development Act of 1968, Public Law 90-448, 
approved August 1, 1968, 82 Stat. 476, 511, amended subsection (d) to permit mortgages 
to cover equipment to be used in the operation of the nursing home. 

* Sec. 610, Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 
149, 180. substituted "90 per centum" for "75 per centum". Sec. 304(g) of Housing and 
Community Development Act of 1974, Public Law 93-383. approved August 22, 1974, 
88 Stat. 633, deleted the words "not to e"^ceed $12,500,000. and", 

2fi8 



NATIONAL HOUSING ACT §232 

the property or project, including ^ equipment to be used in the 
operation of the horne or facility or combined home and facility 
when the proposed improvements are completed and the equip- 
ment is installed. 

(3) The mortgage shall — 

(A) provide for complete amortization by periodic pay- 
ments within such terms as the Secretary shall prescribe; 
and 

(B) bear interest (exclusive of premium charges for insur- 
ance) at not to exceed 5 per centum per annum of the amount 
of the principal obligation outstanding at any time, or not to 
exceed such per centum per annum not in excess of 6 per 
centum as the Secretary finds necessary to meet the mortgage 
market. 

(4) The Secretary- shall not insure any mortgage under this sec- 
tion unless he has received, from the State a.ijency desi.<jnated in 
accordance with section 604(a) (1) or section 1521 - of the Public 
Health Service Act for the State in which is located the nursing 
home or intermediate care facility or combined nursing home and 
intennediate care facility covered by the mortgage, a certification 
that (A) there is a need for such home or facility or combined 
home and facility, and (B) there are in force in such State or in 
the municipality or other political subdivision of the State in 
which the proposed home or facility or combined home and facility 
is to be located reasonable minimum standards of licensure and 
methods of operation governing it. Xo such mortgage shall be 
insured under this section unless the Secretary has received such 
assurance as he may deem satisfactory from the State agency that 
such standards will be applied and enforced with respect to any 
home or facility or combined home and facility located in the State 
for which mortgage insurance is provided under this section. 

(e) The Secretary may consent to the release of a part or parts 
of the mortgaged property or project from the lien of any mortgage 
insured under this section upon such terms and conditions as he may 
prescribe. 

(f) The provisions of subsections (d), (e), (g), (h), (i), (j), (k), 
(1), and (n) of section 207 shall apply to mortgages insured under 
this section and all references therein to section 207 shall refer to this 
section. 

(g)^ The Secretary shall prescribe such regulations as may be 
necessary to carry out the provisions of this section relating to inter- 
mediate care fncilities, after consulting with the Secretary of Health, 
Education, and Welfare with respect to any health or medical aspects 
of the program which may be involved in such regulations. 

(h)3 Tlie Secretary shall also consult with the Secretarv of Health, 
Education, and Welfare as to the need for and the availability of inter- 
mediate care facilities in any area for which an intermediate care 
facility is proposed under this section. 

(i)*(l) The Secretary is authorized upon such terms and condition 
as he may prescribe to make commitments to insure and to insure loans 

1 Section 314(a). Housing and Urban Development Act of 1968. Public Law 90-448. 
approved Aupust 1. 1968. 82 Stat. 476. 512. amended subsection (d)(2) to Permit tbe 
estimated value of equipment to be used in the operation of the home to be included. 

2 Housing and Community" Development Act of 1977. Public Law 95-128. approved 
October 12. 1977. inserted "or Section 1521." , „. ^^« ^ 

^Sec. m. Housing and Urban Development Act of 1969. Public Law 91-lo2. approved 
December 24 1969. 8.3 Stat. 379. .383. added subsections (p:) and (h). 

* Sec. 232 of the National Housing Act amended by adding a new subsection (i) at tlie 
end thereof to provide for purchase and installation of fire safety equipment, authorized by 
P.L. 9.3-204. 87 Stat. 883. approved December 2S. 197.3 

269 



§233 NATIONAL HOUSING ACT 

made by financial institutions or other approved mortgages to nursing 
homes a^nd intermediate care facilities to provide for the purchase and 
installation of fire safety equipment necessary for compliance with 
the 1967 edition of the Life Safety Code of the National Fire Protec- 
tion Association or other such codes or requirements approved by the 
Secretary of Health, Education, and Welfare as conditions of partici- 
pation for providers of services under title XVIII and title XIX of 
the Social Security Act. 

(2) To be eligible for insurance under this subsection a loan shall — 

(A) not exceed the Secretary's estimate of the reasonable cost 
of the equipment fully installed ; 

(B) bear interest at not to exceed a rate determined by the 
Secretary to be necessary to meet the loan market; 

^C) have a maturity satisfactory to the Secretary ; 

(D) be made by a financial institution or other mortgagee 
approved by the Secretary as eligible for insurance under section 
2 or a mortgagee approved under section 203(b) (1) ; and 

(E) comply with other such terms, conditions, and restrictions 
as the Secretary may prescribe. 

(3) The provisions of paragraphs (5), (6), (7), (9), and (10) of 
section 220(h) shall be applicable to loans insured under this subsec- 
tion, except that all references to "home improvement loans" shall be 
construed to refer to loans under this subsection. 

(4) The provisions of subsections (c), (d), and (h) of section 2 
shall apply to loans insured under this subsection, and for the purpose 
of this subsection references in such subsections to "this section" or 
"this title" shall be construed to refer to this subsection. 

EXPERIMENTAL HOUSING 

Sec. 233.^ (a) (1) In order to assist in lowering housing costs and 
improving housing standards, quality, livability, or durability or 
neighborhood design through the utilization of advanced housing tech- 
nology, or experimental property standards, the Secretary is author- 
ized to insure and to make commitments to insure, under this section, 
mortgages (including home improvement loans, and including ad- 
vances on mortgages during construction) secured by properties in- 
cluding dwellings involving the utilization and testing of advanced 
technology in housing design, materials, or construction, or experi- 
mental property standards for neighborhood design if the Secretary 
determines that (A) the property is an acceptable risk, giving con- 
sideration to the need for testing advanced housing technology or 
experimental property standards, (B) the utilization and testing of 
the advanced technology or experimental property standards involved 
will provide data or experience which the Secretary deems to be sig- 
nificant in reducing housing costs or improving housing standards, 
quality, livability, or durability, or improving neighborhood design, 
and (C) the mortgages are eligible for insurance under the provisions 
of this section and under any further terms and conditions which may 
be prescribed by the Secretary to establish the acceptability of the 
mortgages for insurance. 

1 Sec. 103. Houslniir Act of 1961. Public Law 87-70, approved June 30. 1961. 75 Stat. 

■^^Sec^ nS^^Hout?ng^Act of 1964, Public Law 88-560, approved September 2, 1964, 78 
Stat *769 779 780, amended several provisions of sec. 233 to make insurance available 
under the experimental housing program for mortgages or improvement loans meeting the 
recuirements of anv of the other FHA title II programs. Prior to this amendment a 
mortgage could not 'be insured under the experimental housing program unless it met the 
requirements of sec. 203(b) or sec. 207. 

270 



NATIONAL HOUSING ACT §233 

(2)^ The Secretary is further authorized to insure and to make ccm- 
mitments to insure, under this section, mortgages (including advances 
on mortgages during construction) secured by properties in projects to 
be carried out in accordance with plans approved by the Secretary 
under section 108 of the Housing and Urban Development Act of 1968. 

(b) To be eligible for insurance under this section, a mortgage shall 
meet the requirements of one of the other sections or titles ^ of this 
Act ; except that, in lieu of determining the appraised value or the re- 
placement cost of the property in cases involving new construction or 
the estimated cost of repair and rehabilitation or improvement in cases 
involving existing properties, the Secretary shall estimate the cost of 
replacing the property using comparable conventional design, mate- 
rials, and construction, and any limitation upon the maximum mort- 
ga<^e amount available to a nonoccupant owner shall not, in the discre- 
tion of the Secretary, be applicable to mortgages insured under tliis 
section. 

(c) The Secretary may enter into such contracts, agreements, and 
financial undertakings with the mortgagor and others as he deems 
necessary or desirable to carry out the purposes of this section, and 
may expend available funds for such purposes, including the correc- 
tion (when he determines it necessary to protect the occupants), at 
any time subsequent to insurance of a mortgage, of defects or failures 
in the dwellings which the Secretary finds are caused by or related to 
the advanced housing technology utilized in their design or construc- 
tion or experimental property standards. Any ^ authority which the 
Secretary may exercise in connection with a mortgage, or property 
covered by a mortgage, insured under any other section of this title 
(including payments to reduce rentals for, or to facilitate homeowner- 
ship by, lower income families) may be exercised in connection with a 
mortgage, or property covered by a mortgage, meeting the require- 
ments, of such other section (except as specified in subsection (b), 
which is insured under this section to the same extent and in the same 
manner as if the mortgage insured under this section was insured 
under such other section. 

(d) The Secretary may make such investigations and analyses of 
data, and publish and distribute such reports, as he determines to be 
necessary or desirable to assure the most beneficial use of the data and 
information to be acquired as a result of this section. 

(e) Any mortgagee or lender under a mortgage insured under sub- 
section (b) shall be entitled to insurance benefits determined in the 
same manner as such benefits would be determined if such mortgage 
or loan were insured under the section or title ^ of this Act for wdiich 
it otherwise would have been eligible except for the experimental fea- 
ture of the property involved. 

(f ) Notwitlistanding the provisions of subsection (e) of this section, 
in the case of default on any mortgage insured under this section, 

1 Sec. lOS(f), Housing and Urban Development Act of 1968. Public Law 90-448, approved 
Aujrnst 1. 19t5S. S2 Stat. 470. 49(5. adiled this subparafrraph (2). 

2 Sec. 309, Housing and Urban Development Act of 1968, Public Law 90-448, approved 
August 1. lOfJS. S2 Stat. 476. .^)09. substituted the phrase "or titles of this Act" for the 
phrase "of this title" thus malting the experimental housing program available for use in 
the FHA titlf X and XI protrrams. as well as those under title II. 

3 Section 108(f), Housing and Urban Development Act of 1968, Public Law 90-448, 
approved August 1. 196.S, 82 Stnt. 476, 496. addPd this sentence. 

* Section 309. Housing and Urban Development Act of 1968, Public Law 90-448, approved 
August 1. 1968, S2 Stat. 476, .^>09, substituted the phrase "or title., of this Act" for the 
phracp "of this title" thus making the experimental housing procrram available for use in 
the FllA title X and XI programs, as well as those under title II. 

271 



§234 NATIONAL HOUSING ACT 

the Secretary in his discretion, in accordance with such regulations 
as he m9,y prescribe, may make payments pursuant to such subsections 
in cash or in debentures (as provided in the mortgage insurance con- 
tract), or may acquire the mortgage loan and the security therefor 
upon payment to the mortgagee in cash or in debentures (as provided 
in the mortgage insurance contract) of a total amount equal to the 
unpaid principal balance of the loan plus any accrued interest and 
any advances approved by the Secretary made previously by the 
mortgagee under the provisions of the mortgage. After the acquisi- 
tion of the mortgage by the Secretary the mortgagee shall have no 
further rights, liabilities, or obligations with respect to the mortgage. 
The appropriate provisions of sections 204 and 207 relating to the 
issuance of debentures shall apply with respect to debentures issued 
under this subsection, and the appropriate provisions of sections 204 
and 207 relating to the rights, liabilities, and obligations of a mort- 
gagee shall apply with respect to the Secretary when he has acquired 
an insured mortgage under this subsection, in accordance with and 
subject to regulations (modifying such provisions to the extent nec- 
essary to render their application for such purposes appropriate and 
effective) which shall be prescribed by the Secretary, except that as 
applied to mortgages insured under this section (1) all references in 
section 204 to the" Mutual Mortgage Insurance Fund or the Fund 
shall be construed to refer to the General Insurance Fund, and (2) 
all references in section 204 to section 203 shall be construed to refer 
to this section (g) .^ 

MORTGAGE IXSURANCE FOR CONDOMINITJMS 

Sec. 234.^ (a) The purpose of this section is to provide an addi- 
tional means of increasing the supply of privately owned dwelling 
units where, under the laws of the State in which the property is 
located, real property title and ownership are established with respect 
to a one- family unit which is part of a multifamily project. 

(b) The terms "mortgage," "mortgagee," mortgagor," "maturity 
date," and "State" shall have the meanings respectively set forth in 
section 201, except, that the term "mortgage" for the purpose of sub- 
section (c) may include a first mortgage given to secure the unpaid 
purchase price of a fee interest in, or a long-term leasehold interest in^ 
a one-family unit in a multifamily project and an undivided interest 
in the common areas and facilities which serve the project where the 
mortgage is determined by the Secretary to be eligible for insurance 

1 Section 1108(n), Housing and Urban Development Act of 1965, Public Law 89-117, 
approved August 10, 1965, 79 Stat. 451, 504, repealed this subsection (g) under which 
a $1 million Experimental Housing Insurance Fund had been established to carry out the 
provisions of this section. 

2 Sec. 104, Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 
160, added sec. 234. 

Sec. 119, Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 
769, 780, 781, 782, amended sec. 234 to provide increases in the maximum amount and 
maturity of mortgages financing purchases of family units in condominiums. 

Prior to this amendment the eligibility requirements under sec. 234(c) read as follows: 
"To be eligible for insurance pursuant to this section a mortgage shall (A) involve a 
principal obligation in an amount not to exceed the limits per room and per family dwelling 
unit provided by section 207(c)(3), and not to exceed the sum of (i) 97 per centum of 
$13,500 of the amount which the Commissioner estimates will be the appraised value of 
the family unit including common areas and facilities as of the date the mortgage is 
accepted for insurance, (ii) 90 per centum of such value in excess of $13,500 but not in 
excess of $18,000, and (iii) 70 per centum of such value in excess of $18,000, and (B) 
have a maturity satisfactory to the Commissioner but not to exceed, in any event, thirty 
years from the date of the beginning of amortization of the mortgage of three-fourths of 
the Commissioner's estimate of the remaining economic life of the structure, whichever is 
the lesser." 

272 



NATIONAL HOUSING ACT? §234 

under this section. The term "common areas and facilities" as used in 
this section shall be deemed to include the land and such commercial, 
community, and other facilities as are approved by the Secretary. 

(c) The Secretary is authorized,, in his discretion and under such 
terms and conditions as he may prescribe (including the minimum 
number of family units in the project which shall be offered for sale 
and provisions for the protection of the consumer and the public inter- 
est), to insure any mortgage covering a one-family imit in a multi- 
family project and an undivided interest in the common areas and 
facilities which serve the project if (1) the mortgage meets the re- 
quirements of this subsection and of section 203(b), except as that 
section is modified by this subsection, (2) the project is or has been 
covered by a mortgage insured under any section (except section 
213(a) (1) and (2) of this Act), notwithstanding any requirements in 
any such section that the project be constructed or rehabilitated for the 
purpose of providing rental housing: Provided^ That a one- family 
unit in a multifamily project involving eleven or less units, or twelve 
or more units in the case of a multifamily project the construction 
of which was completed more than a year prior to the application for 
mortgage insurance, shall be eligible for insurance without having been 
covered by a project moi'tgage, and (3) the mortgagor is acquiring, or 
has acquired, a family unit covered by a mortgage insured under this 
subsection for his own use and occupancy and will not own more than 
four one-family units covered by mortgages insured under this sub- 
section. Any project proposed to be constructed or rehabilitated after 
the date of enactment of the Housing Act of 1961 - with the assistance 
of mortgage insurance under this Act, where the sale of family units 
is to be assisted with mortgage insurance under this subsection, shall be 
subject to such requirements as the Secretary ma}' pi*escribe. To be eligi- 
ble for insurance pursuant to this subsection, a mortgage shall (A) in- 
volve a principal obligation in an amount not to exceed $60,000,^ and 
not to exceed the sum of (i) 07 Der centum (100 per centum if the 
mortgagor is a veteran as defined under section 203(b)(2) 
of this Act) ^ of $25,000 of the appraised value of the prop- 
erty as of the date the mortgage is accepted for insurance and 
(ii) 95 per centum of such value in excess of $25,000,^ and (B) 
have a maturity satisfactory to the Secretary, but not to exceed, in 
any event, thirty-five years from the date of the beginning of amortiza- 
tion of the mortgage or three-fourths of the Secretary's estimate of the 
remaining economic life of the project, whichever is the lesser. In 

1 Sec. 303(a), Housing and Urban Development Act of 1968, Public Law 90-448, ap- 
proved August 1. 1968. 82 Stat. 476. 507. added this proviso. Amended by Sec. 13(a). 
Housing and Commiinitv Development Amendments of 1978. Public Law 95-557, 92 Stat. 
2080. approved October 31. 1978. 

^ June 1^0. 19«1. 

3 Sec. 13(h)(1). Housing and Urban Development Act of 1969. Public Law 91-152, 
approved December 24. 1969, 83 Stat. 379. 384. substituted "?33.000" for "$30,000". Sec. 
302(e) of Housing and Community Development Act of 1974. Public Law 93-383. 88 Stat 
633. approved Auerust 22. 1974. substituted "$45,000" for "5R33,000". Amended by Housing 
and Community Development Act of 1977, Public Law 95-128, approved October 12, 1977, 
to read "S;60.000" in lieu of "$45,000". 

*The parenthetical clause was added bv Sec. 313(b). Housing and Community Develop- 
ment Amendments of 1978. Public Law 95-557, 92 Stat. 2080. approved October 31. 1978. 

•'^ Sec. 310(d) of Housing and Community Development Act of 1974, Public Law 93-383, 
88 Stat. 633. approved Aujrust 22. 1974, amended part of clause (A) of sec. 234(c) of the 
National Housintr Act. Prior to this amendment it read as follows : "and not to exceed 
the sum of (1) 97 per centum of $15,000 of the amount which the Secretary estimates 
will be the appraised value of the family unit Including common areas and facilities as 
of the date the mortgaee is accepted for insurance, (ii) 90 per centum of such value in 
excess of $15,000 but not In excess of $25,000 and (lii) 80 per centum of such value in 
excess of $25,000". Amended bv Housing and Community Development Act of 1977, Public 
Law 95-128, approved October 12, 1977, to read as set forth in the text. 

273 



§234 NATIONAL HOUSING ACT 

determining the amount of a mortgage in the case of a nonoccupant 
mortgagor the reference to paragraph (2) of section 203 (b) in section 
203(b) (8) shall be construed to refer to the preceding sentence in this 
subsection. The mortgage shall contain such provisions as the Secretary 
determines to be necessary for the maintenance of common areas and 
facilities and the multifamily project. The mortgagor shall have ex- 
clusive right to the use of the one-family unit covered by the mortgage 
and, together with the owners of other units in the multifamily proj- 
ect, shall have the right to the use of the common areas and facilities 
serving the project and the obligation of maintaining all such common 
areas and facilities. The Secretary may require that the rights and 
obligations of the mortgagor and the owners of other dwelling units 
in the project shall be subject to such controls as he determines to be 
necessary and feasible to promote and protect individual owners, the 
multifamily project and its occupants. For the purposes of this sub- 
section, the Secretary is authorized in his discretion and under such 
terms and conditions as he may prescribe to permit one-family units 
and interests in common areas and facilities in multifamily projects 
covered by mortgages insured under any section of this Act other than 
section 213(a) (1) and (2) to be released from the liens of those 
mortgages. 

(d)^ In addition to individual mortgages insured under subsection 
(c), the Secretary is authorized, in his discretion and under such 
terms and conditions as he may prescribe, to insure blanket mortgages 
(including advances on such mortgages during construction) which 
cover multifamily projects to be constructed or rehabilitated in cases 
where the mortgage is held by a mortgagor, approved by the Secretary, 
which — • 

(1) has certified to the Secretary, as a condition of obtain- 
ing the insurance of a blanket mortgage under this subsection, that 
upon completion of the multifamily project covered by such mort- 
gage it intends to commit the ownership of the multifamily project 
to a plan of family unit ownership under which each family unit 
would be eligible for individual mortgage insurance under sub- 
section (c) and will faithfully and diligently make and carry out 
all reasonable efforts to establish such plan of family unit owner- 
ship and to sell such family units to purchasers approved by the 
Secretary ; and 

(2) shall be regulated or restricted by the Secretary as to rents, 
charges, capital structure, rate of return, and methods of opera- 
tion until the termination of all obligations of the Secretary 
under the insurance and during such further period of time as 
the Secretary shall be the owner, holder, or reinsurer of the 
mortgage. The Secretary may make such contracts with and 
acquire for not to exceed $100 such stock or interest in such mort- 
gagor as he may deem necessary to render effective the regulation 
and restriction of such mortgagor. The stock or interet acquired 
by the Secretary shall be paid for out of the General Insurance 



1 Insurance is authorized by the Housing Act of 1964 for blanket mortgages to finance 
the construction or rehabilitation of multifamily projects to be sold as condominiums. 
Prior to this amendment the construction of the condominium structure was required 
to be financed under one of FHA's multifamily housing programs (except the sec. 213 
cooperative program was excluded). . , . ^^ ^ ^ ^ 

The 1964 Act permits condominiums to consist of more than one structure ana an 
Investor-sponsor cooperative to be converted into a condominium. 



274 



NATIONAL HOUSING ACT §234 

Fund, and shall be redeemed by the mortgagor at par at any time 
upon the request of the Secretary after the termination of all 
obligations of the Secretary under the insurance, 
(e)^ To be eligible for insurance, a blanket mortgage on any multi- 
family project of a mortgagor of the character described in subsection 
{d) shall involve a principal obligation in an amount — 

(2) not to exceed 90 per centum of the amount which the Secre- 
tary estimates will be the replacement cost of the project when the 
proposed physical improvements are completed ; 

(3) not to exceed, for such part of the project as may be attrib- 
utable to dwelling use (excluding exterior land improvements as 
defined by the Secretary) , $19,500 ^ per family unit without a bed- 
room, $21,600 ^ per family unit with one bedroom, S25,800 ^ per 
family unit with two bedrooms, $31,800 ^ per family unit with 
three bedrooms, and $3G.000 ^ per family unit with four or more 
bedrooms: except that as to projects to consist of elevator-type 
striirtures the Secretaiy nuiy. in his discretion, increase the dollar 
amount limitations per family unit to not to exceed $22,500 * per 
familv unit without a bedroom, ^25.200 * per family unit with one 
bedroom. $30,000* per family unit with two bedrooms, $38,700* 
per family unit with three bedrooms, and $43,758 * per family 
unit with four or more bedrooms, as the case may be. to compensate 
for higher costs incident to the construction of elevator-type struc- 
tures of sound standard^ of construction and design; and except 
that the Secretary may, by regulation, increase any of the fore- 
going dollar amount limitations contained in this paragraph by 
not to exceed 50 per centum in any geograpliical area ^ where he 
finds that cost levels so require ; and 

(4) not to exceed an amount equal to the snm of the unit mort- 
gage amounts determined under the provisions of subsection (c) 
assnming the mortgagor to be the owner and occupant of each fam- 
ily unit. 

(f ) Any blanket mortgage insured under subsection (d) shall pro- 

^ «-"ec. 113(h) (2) and (3). Housing and Urban Development Act of 1969, Public Law 
91-152. approved December 24. 1909. 8?. Stat. 879. "84, increnserl by 10 percont as shown 
In tb.e text the dollar limitations applicable to family units in this par. (e^ (^). 

2 Sec. 304(h) of HoHsinjr and ronmuinitv Development Act of 1974 Public Law 9.'^-3'=:3, 
88 Stat. C,P,?,, approved August 22. 1974. struck para. (1) of sec. 234(e) of the National 
Housing Act but did not renumber following paragraphs. 

3 Sec. .103(g)(1) Of Housing and Communitv Devplopment Act of 1974. Public Law 
93-383. 88 Stnt. 033. approved .\ugust 22. 1074. substituted "813.000" for "S9.900". 
".?18.000" for "S^IJoO". ">21.500"' for "''•16.r)n0". "826.500" for "820.350". and "830,000" 
for "'3.100". ^i^r. 8(b) (7) ^\) of thp Housiiic: Authorization Act of 1970. Public Low 
94-375. approved August 3. 1976. 90 Stat. 1007, amenoed section 234(e) i3) of the 
National Housinj: Act bv substituting "$19,500" for "$13,000". "821.000" for "81^.000". 
"$25,800" for "821.500", "831.800" for "$20,500", and ".?36,000" for "$30,000". 

* Sec. 303(i:)(2) of Ilousinc: ond pDUimunitv Devcloiuncnt Act of 1974. Pulilic Law 
9.3-383. 88 Stat. 033. approved August 22. 1974. substituted "815.000" for "8li.r,50", 
"$21,000" for "S:iP,.500" "-25.750" for "819.<^00". "8 32.250" for "824.750". and "830,405" 
for "828.050". Sec. 8(b)(7)(B) of the Housinsr Authorization Act of 1970. Public Law 
94-375, .'.pproved Autrust 3. 1970. 00 Stat. 1007. further amended section 234(eW3) of 
the National Housing Act bv substituting "$22,500" for "$15,000", "825.200" for 
"$21,000." "$30,900" for "$25,750", "$3S.700" for "$32,250", and "$43,758" for 
••$36,465". , , 

■5 Sec. 3 of Public Law 94-173, 89 Stat. 1027, approved December 23. 1975, amended 
sec. 234^eM3) of the National Housing Act by deleting the words "by not to exceed 45 
per centum in any geographical area' and inserting the words "by not to exceed <o 
per centum In anv geographical area". Sec. 8(a) of the Housing Authorization Act of 
1970. Public Law" 94-375. approved Autrust 3. 1076. 90 Stat. 1907. amended section 
234(e)(3) of the National Housing Act by striking "by not to exceed 75 per centum 
In any geographical area" and Inserting in lieu thereof "by not to exceed 50 per centum 
In any geographical area". 



275 



§235 NATIONAL HOUSING ACT 

vide for complete amortization by periodic payments within such terms 
as the Secretary may prescribe but not to exceed forty years from the 
beginning of amortization of the mortgage, and shall boar interest 
(exclusive of premium charges for insurance) at not to exceed 514 per 
centum per annum on the amount of the principal obligation outstand- 
ing at any time or not to exceed such per centum per annum not in 
excess of 6 per centum ^ as the Secretary finds necessary to meet the 
mortgage market. The Secretary may consent to the release of a part 
or parts' of the mortgaged property from the lien of the blanket mort- 
gage upon such terms and conditions as he may prescribe and the 
blanket mortgage may provide for such release. The project covered 
by the blanket mortgage may include four ^ or more family units and 
such commercial and community facilities as the Secretary deems ade- 
quate to serve the occupants. 

(g) Any mortgagee under a mortgage insured under subsection (c) 
of this section is entitled to receive the benefits of the insurance as 
provided in section 204(a) of this Act with respect to mortgages in- 
sured under section 203, and the provisions of subsections (b) , (c) , (d) , 
(e), (f), (g), (h), (j), and (k) of section 204 shall be applicable to 
the mortgages insured under subsection (c) of this section, except that 
(1) all references in section 204 of the Mutual Mortgage Insurance 
Fund or the Fund shall be construed to refer to the General Insurance 
Fund, (2) all references therein to section 203 shall be construed to re- 
fer to subsection (c) of this section, and (3) the excess remaining, re- 
ferred to in section 204(f) (1), shall be retained by the Secretary and 
credited to the General Insurance Fund. 

(h) The provisions of subsections (d), (e), (g), (h), (i), (j), (k), 
(1), and (n) of section 207 shall be applicable to mortgages insured 
under subsection (d) of this section. 

(i) The provisions of sections 225 and 230 shall be applicable to the 
mortgages insured under subsection (c) of this section. 

HOMEOWNERSHIP FOR LOWER INCOME FAMILIES 

Sec. 235.^ (a) (1)* For the purpose of assisting lower-income fam- 
ilies in acquiring homeownership or in acquiring membership in a co- 
operative association operating a housing project, the Secretary is au- 
thorized to make, and to contract to ma ke, periodic assistance payments 
on behalf of such homeowners and cooperative members. The assist- 
ance shall be accomplished through payments to mortgagees holding 
mortgages meeting the special requirements specified in this section or 
which mortgages are assisted under a State or local program provid- 
ing assistance through loans, loan insurance or tax abatement.^ 

(2) (A) Notwithstanding any other provision of this section, the 

1 Sec. 3(c), Public Law 90-301, approved May 7, 1968, 82 Stat. 113, 114. substituted 
the 6 percent maximum for the 5^4 percent maximum. See also, sec. 3(a), Public Law 
90-301, immediately following the National Housing Act in this compilation, which permits 
the Secretary, until October 1, 19fi9, to set a higher interest rate. 

2 Section 303(c), Housing and Urban Development Act of 1968, Public Law 90-448, 
approved August 1. 1!)6S, 82 Stat. 476. o07, substituted "four" for "five." 

3 Sec. 101(a), Housing and Urban Development Act of 1968, Public Law 90-448, ap- 
proved August 1, 1068, 82 Stat. 476, 477. added sec. 235. 

*Sec. 3(f)(1)(A) of the Housing Authorization Act of 1976, Public Law 94-375, ap- 
proved August 3, 1976, 90 Stat. 1067, amended section 235(a) of the National Housing 
Act by inserting "(1)" Immediately after "(a)" ; sec. 3(f) (1) (B) of this Act also amended 
section 235 by adding new paragraphs "(2) (A) and (B)". 

5 Sec. 211(b) of Housing and Community Development Act of 1974, Public Law 93-383, 
88 Stat. 633, approved August 22, 1974, amended sec. 235(a) by adding at the end thereof 
"or which mortgages are assisted under a State or local program providing assistance 
through loans, loan insurance or tax abatement". 

276 



NATIONAL HOUSING ACT §235 

Secretary is authorized to make periodic assistance payments under 
this section on behalf of families whose incomes do not exceed the 
maximum income limits prescribed pursuant to subsection (h) (2) 
of this section for the purpose of assisting such families in acquiring 
ownership of a mobile home consisting of two or more modules and 
a lot on which such mobile home is or will be situated, except that 
periodic assistance payments pursuant to this paragraph shall not be 
made with respect to more than 20 per centum of the total number of 
units with respect to which assistance is approved under this section 
after January 1, 1976. Assistance payments under this section pursuant 
to this paragraph shall be accomplished through payments on behalf 
of an owner of lower income of a mobile home as described in the 
preceding sentence to the financial institution which makes the loan, 
advance of credit, or purchase of an obligation representing the loan 
or advance of credit to finance the purchase of the mobile home and 
the lot on which such mobile home is or will be situated, but only if 
insurance under section 2 of this Act covering such loan, advance of 
credit, or obligation has been granted to such institution. 

(B) Notwithstanding the provisions of subsection (c) of this sec- 
tion, assistance payments provided pursuant to this paragraph shall 
be in an amount not exceeding the lesser of — 

(i) the balance of the monthly payment for principal, interest, 
real and personal property taxes, insurance, and insurance pre- 
mium chargeable under section 2 of this Act due under the loan 
or advance of credit remaining unpaid after applying 20 per 
centum of the mobile homeowner's income ; or 

(ii) the difference between the amount of the monthly pay- 
ment for principal, interest, and insurance premium chargeable 
under section 2 of this Act which the mobile homeowner is obli- 
gated to pay under the loan or advance of credit and the monthly 
payment of principal and interest which the owner would be 
obligated to pay if the loan or advance of credit were to bear 
interest at a rate derived by subtracting from the interest rate 
applicable to such loan or advance of credit the interest rate dif- 
ferential between the maximum interest rate plus mortgage insur- 
ance premium applicable to mortgages insured under subsection 
(i) of this section at the time such loan or advance of credit is 
made and the interest rate which such mortgages are presumed 
imder regulations prescribed by the Secretary, to bear for pur- 
poses of subsection (c) (2) of this section, 
(b) To qualify for assistance payments, the homeowner or the co- 
operative member shall be of lower income and satisfy eligibility 
requirements prescribed by the Secretary, and — 

(1) the homeowner shall be a mortgagor under a mortgage 
which meets the requirements of and is insured under subsection 
(i) or (j) (4) ^ of this section : Provided^ That a mortgage meeting 
the requirements of subsection (i) (3) (A) of this section but 
insured under section 237 may qualify for assistance payments if 
such mortgage was executed by a mortgagor who is determined 
not to be an acceptable credit risk for mortgage insurance pur- 
poses (but otherwise eligible) under subsection (j) (4) of this 

1 Sec. 101(c)(4). Housing: .and Urban Development Act of 1968. Public Law 90-448. 
approved Aiip:ust 1, 19fi8. 82 Stat. 47fi. 484. provided that the purchase of any individual 
dwelllnjr. sold by a nonprofit organization pursuant to the provisions of section 221(h) (5) 
after the date of enactment of sec. 235, may be financed with a mortgagre insured under 
the provisions of sec. 235 (j) (4), but the mortgage shall bear interest at the rate provided 
In sec. 235(j)(2)(C). 

277 



§235 NATIONAL HOUSING ACT 

section or under section 221(d) (2) or 234(c) and accepted as a 
reasonably satisfactory credit risk under section 237 ; or 

(2) the cooperative association of which the family is a member 
shall operate (A) a housing project the construction or substantial 
rehabilitation of which has been financed with a mortgage insured 
under section 213 or section 221(d) (3)^ and which has been com- 
pleted within two years prior to the filing of the application for as- 
sistance payments and the dwelling unit has had no previous oc- 
cupant other than the family : Provided ^ That if any cooperative 
member who has received assistance payments transfers his mem- 
bership and occupancy rights to another person who satisfies the 
eligibility requirements prescribed by the Secretary and under- 
takes the obligation to pay occupancy charges, the new cooperative 
member may qualify for assistance payments upon the filing of an 
application with respect to the dwelling unit involved to be oc- 
cupied by him; or (B)^ a housing project which is financed under 
a State or local program providing assistance through loans, loan 
insurance, or tax abatements, and which prior to completion of 
construction or rehabilitation is approved for receiving the benefits 
of this section : Provided further^ That assistance payments may be 
made with respect to a dwelling unit in an existing cooperative 
project which meets such standards as the Secretary may prescribe, 
if tifie family qualifies as a displaced family as defined in section 
221(f), or a family which includes five or more minor persons, or 
a family occupying low-rent public housing: Provided further^ 
That the amount of the mortgage attributable to the dwelling unit 
shall involve a principal obligation not in excess of $32,000 * 
($38,000 in any geographical area where the Secretary authorizes 
an increase on the basis of a finding that cost levels so require) , 
except that with respect to any family with five or more persons 
the foregoing limits shall be $38,000 and $44,000, respectively.* 
(c) The assistance payments to a mortgagee by the Secretary on 
behalf of a mortgagor shall be made during such time as the mortgagor 
shall continue to occupy the property which secures the mortgage: 
Provided^ That assistance payments may be made on behalf of a 
homeowner who assumes a mortgage insured under subsection (i)^ or 
(j) (4) with respect to which assistance payments have been made 
on behalf of the previous owner, if the homeowner is approved by the 

1 Housing and Community Development Act of 1977, Public Law 95-128, approved 
October 12, 1977, inserted "or section 221(d) (3). 

2 Sec. 106(b), Housing and Urban Development Act of 1969, Public Law 91-152, ap- 
proved December 24. 1969, 83 Stat. 379. 381, amended this proviso to make all subsequent 
purchasers of cooperative units in sec. 235 projects eligible for homeownership assistance, 
payments, if otherwise qualified. Immediately prior to this amendment, payments were 
authorized only for the initial two purchasers of a sec. 235 cooperative unit. 

3 Sec. 107. Housing and Urban Development Act of 1970, Public Law 91-609, approved 
December 31, 1970, 84 Stat. 1770, 1771, inserted clause (B). 

* Sec. 211(c)(1) of Housing and Community Development Act of 1974, Public Law 
9.3-383. 88 Stat. 633, approved August 22, 1974, substituted "$21,G00" for "$18,000", 
"$25,200" for "$21,000", "$25,200" for "$21,000" and "$28,800" for "$24,000". Prior to 
enactment of Public Law 93-383, sec. 113 (j). Housing and Urban Development Act of 
1969. Public Law 91-152, approved December 24, 1969, 83 Stat. 379, 385, substituted 
"18.000" for "$15,000", $21,000" for "$17,500". and "$24,000" for "$20,000", Sec. 3(b) 
of the Housing Authorization Act of 1976, Public Law 94-375, approved August 3, 1976, 
90 Stat. 1067, amended the last proviso section 235(b)(2) of the National Housing Act 
by strikinsr out "$21,600", "$25,200", "$25,200", and "$28,800" and inserted in lieu 
thereof "$25,000", $29,000", $29,000", and $33,000", respectively. Housing and Com- 
munity Development Act of 1977, Public Law 95-128, approved October 12, 1977, sub- 
stituted "$32,000" for "$25,000", "$38,000" for "$29,000" and "$44,000" for "$33,000". 

s Sec. 106(a). Housing and Urban Development Act of 1969, Public Law 91-152 ap- 
proved December 24, 1969, 83 Stat. 379, 381, amended this subsection (c) to authorize 
homeownership assistance payments for home purchasers, otherwise eligible for such 
assistance, who assume mortgages insured under section 235(1) (one and two-family 
dwellings and condominium units for lower-income families) . 

I 278 



NATIONAL HOUSING ACT § 235 

Secretary as eligible for receiving such assistance: Provided further/ 
That the Secretary is authorized to continue making such assistance 
})ayments where the mortgage has been assigned to the Secretary. 
'J1ie payments shall be in an amount not exceeding the lesser of — 

(1) the balance of the monthly payment for principal, inter- 
est, taxes, insurance, and mortgage insurance premium due under 
the mortgage remaining unpaid after applying 20 per centum of 
the mortgagor's income ; or 

(2) the difference between the amount of the monthly pay- 
ment for principal, interest, and mortgage insurance premium 
which the mortgagor is obligated to pay under the mortgage and 
the monthly payment for principal and interest which the mort- 
gagor would be obligated to pay if the mortgage were to bear 
interest at the rate of 1 per centum per annum. 

(d) Assistance payments to a mortgagee by the SecretaiT on be- 
half of a family holding membership in a cooperative association op- 
orating a housing project shall be made only during such time as the 
family is an occupant of such project and shall be in amounts com- 
puted on the basis of the formula set forth in subsection (c) applying 
the cooperative member's proportionate share of the obligations under 
the project mortgage to the items specified in the formula. 

(e) The Secretary may include in the payment to the mortgagee 
such amount, in addition to the amount computed under sul)section 
(a)(2)(B),^ (c), (d),or (j) (7), as he deems appropriate to reimburse 
the mortgagee for its expenses in handling the mortgage. 

(f) Procedures shall be adopted by the Secretary for recertifica- 
tions of the mortgagor's (or cooperative member's) income at inter- 
vals of two years (or at shorter intervals where the Secretary deems it 
desirable) for the purpose of adjusting the amount of such assistance 
payments within the limits of the formula described in subsection (c). 

(g) The Secretary shall prescribe such regulations as he deems 
necessary to assure that the sales price of, or other consideration paid 
in connection with, the purchase by a homeowner of the property with 
respect to which assistance payments are to be made is not increased 
above the ap])raised value on which the maximum mortgage which the 
Secretary will insure is computed. 

(h) (1) There are authorized to be appropriated such sums as may 
be necessary to carry out the provisions of this section, including such 
sums as may be necessary to make the assistance payments under con- 
tracts entered into under this section. The aggregate amount of out- 
standing 2 contracts to make such payments shall not exceed amounts 
approved in appropriation Acts,* and payments pursuant to such con- 

1 Sec. 418(a), Housinpr and Urban Dovelopment Act of 1969, Public Law 91-152, ap- 
provod Derpmber 24. 1009. 83 Stat. 379, 402. Inserted this proviso. 

•-'Sec. .3(f)(2) of tlie Housing Authorization Act of 1976. Tublic Law 94-375. approved 
Aupjust 3. 1076. 00 Stat. 1067. amended section 235(d) of the National Housing: Act by 
inserting ininiodiatelv before "(c)" the foUowinjr : "(a) (2) (B)". 

3 Sec. 102(a)(1). "Housinp: and Urban Development Act of 1970, Public Law 91-609, 
approved December 31, 1970. 84 Stat. 1770. inserted '•nutstandinj:". 

♦The Supplemental Appropriation Act, 1969, Public Law 90-608, approved October 21, 

1968. 82 Stat. 1100, 1193, provided "That the total p.iyments that may be required in 
any fiscal vear by all contracts entered into under section 235 shall not exceed $25,000,000". 

The Second Supplemental Appropriation Act. 1060, Public Law 01-47, approved July 22, 

1969. 8.->. Stat. 40. 53. provided that the limitation "on total payments that may be required 
In any fiscal vear bv all contracts entered into under section 235 of the National Housing 
Act. as amended * * * is increased bv $45,000,000 * * *." 

The Independent Offices and Department of Housing and Urban Development Appro- 
priation Act. 1070, Public Law 01-126, approved November 26, 1969, 83 Stat. 221, 2^8, 
Increased this limitation bv $00,000,000. ^ ., , 

The Second Supplemental -Appropriation Act. 1070. Public Law 91-305. approved .July 
6, 1970, 84 Stat. 376. 370. Increased this limitation by .«35,000,000, and the Independent 
Offices and Department of Housing and Turban Development Apnronriation Act. 1971, Public 
Law 01-55(), approved December 17, 1970, 84 Stat. 1442. 1458. further increased thi3 
limitaUon by $130,000,000. 

279 



§235 NATIONAL HOUSING ACT 

tracts shall not exceed $76,000,000 per annum prior to July 1, 1969, 
which maximum dollar amount shall be increased by $125,000,000 ^ on 
July 1, 1909, by $150,000,000 on July 1, 1970, by $200,000,000 on July 1, 
1971, and by such sums as may be approved in appropriation Acts after 
June 30, 1974, and prior to July 1, 1976.^ Upon the expiration of one 
year following the date of enactment of the Housing and Community 
Development Act of 1974, the Secretary shall not enter into new con- 
tracts for assistance payments under this section utilizing authority ap- 
proved in appropriation Acts prior to July 1, 1974.^ 

(2) Assistance payments under this section may be made only with 
respect to a family whose income at the time of initial occupancy does 
not exceed 95 per centum * of the median income for the area, as deter- 
mined by the Secretary with adjustments for smaller and larger 
families, except that the Secretary may establish income ceilings 
higher or lower than 95 per centum * of the median for the area on the 
basis of his findings that such variations are necessary because of pre- 
vailing levels of construction costs, unusually high or low median 
family incomes, or other factors.^ 

(3) Notwithstanding the provisions of subsections (b) (2) and 
(i) (3) (A) with respect to the prior construction or rehabilitation of 
a dwell in f^, or of the project in which there is a dwelling unit, for 
which assistance payments may be made, and notwithstanding the 
provisions of subsection (j) (1) authorizing the purchase of housing 
which is neither deteriorating nor substandard, not more than — 

(A) 25 per centum of the total amount of contracts for assist- 
ance payments authorized b}^ appropriation Acts to be made prior 
to July 1, 1969, and 

(Bj^ 30 per centum of the total additional amount of con- 
tracts for assistance payment authorized by appropriations Acts 
to be made on or after July 1, 1969 J 
may be made with respect to existing dwellings, or dwelling units in 
existing projects. 

(4) At least 10 per centum of the total amount of contracts for 
assistance payments authorized by appropriation Acts to be made 
after June 30, 1971, shall be available for use only with respect to 



1 Sec. 107(a), Housing and Urban Development Act of 1969. Public Law 91-152, ap- 
prove'i December 24, 1969, 83 Stat. 379, 381, substituted "$125,000,000 on July 1. 1969", 
for "$100,000,000 on July 1, 1969," and sec. 102(a)(2). Housing and Urban Development 
Act of 1970. Public Law 91-609, approved December 31, 1970. 84 Stat. 1770. substituted 
"$150,000,000 on July 1. 1970, and by .$200,000,000 on July 1, 1971" for "$125,000,000 
on July 1, 1970, and by $170,000,000 on July 1, 1971". 

2 Sec. 211(a)(1) of Housing and Community Development Act of 1974. Public Law 93- 
383, 88 Stat. 633. approved August 22, 1974, added the words "by $200,000,000 on July 1, 
1971. and by such sums as may be approved in appropriation Acts after June 30, 1974, 
and prior to July 1, 1976". 

3 Sec. 211(a)(2) of Housing and Community Development Act of 1974, Public Law 
93-383, 88 Stat. 633, approved August 22, 1974, added the last sentence of subsection 
(h)(1). 

* Sec 3(e) of the Housine Authorization Act of 1976. Public Law 94-^375, anproved 
August 3, 1976, 90 Stat. 1067, amended section 235(h)(2) of the National Housing Act 
by striking "80 per centum" wherever it appears and inserting in lieu thereof "95 per _ 
centum". 

5 Sec. 211(a)(3) of Housing and Community Development Act of 1974, Public Law 
93-383, 88 Stat. 633, approved August 22, 1974. inserted a new paragraph (2). 

« Immediately prior to amendment by sec. 109. Housing and Urban Development Act 
of 1069, Public Law 91-152, approved Derember 24, 1960. 83 Stat. 379. 381, only 15 per- 
cent of the total amount of contracts authorized by appropriation acts for fiscal year 1970 
and only 10 percent of the total amount of contracts authorized by appropriation acts for 
fiscal year 1971 could be made with respect to existing housing. 

"^ Sec. 105. Housing and Urban Development Act of 1970. Public Law 91-609, approved 
December 31, 1970, 84 Stat. 1770, 1771, substituted "July 1. 1972" for "July 1, 1971" 
and added paragraph (4). Sec. 211(a)(4) of Housing and Community Development Act 
of 1974, Public Law 93-383, 88 Stat. 633, substituted "on or after July 1, 1969" for "prior 
to July 1, 1972". 



280 



NATIONAL HOUSING ACT §235 

dwellings, or dwelling units in projects, which are approved by the 
Secretary prior to substantial rehabilitation. 

(i) (1) The Secretary is authorized, upon application by the mort- 
gagee, to insure, a mortgage (including advances with respect to 
property construction or rehabilitation pursuant to a self-help pro- 
gram) ^ executed by a mortgagor who meets the eligibility require- 
ments for assistance payments prescribed by the Secretary under sub- 
section (b) . Commitments for the insurance of such mortgages may be 
issued by the Secretary prior to the date of their execution or disburse- 
ment thereon, upon such tenns and conditions as the Secretary may 
prescribe. 

(2) To be eligible for insurance under this subsection, a mortgagee 
shall meet the requirements of section 221(d) (2) or 234(c), except as 
such requirements are modified b}^ this subsection. 

(3) A mortgage to be insured under this subsection shall — 

(A) involve a single-family dwelling which has been approved 
by the Secretary prior to the beginning of construction or sub- 
stantial rehabilitation, or a two-family dwelling one of the units 
of which is to be occupied by the owner ^ and which is approved 
by the Secretary prior to the beginning of substantial rehabili- 
tation, or a one-family unit in a condominium project (together 
with an undivided interest in the common areas and facilities 
serving the project) which is released from a multi-family proj- 
ect, the construction or substantial rehabilitation of which has 
been completed within two years prior to the filing of the applica- 
tion for assistance payments with respect to such family unit and 
the unit has had no previous occupant other than the mortj^agor: 
Provided^ that the mortgage may involve an existing dwelling or 
family unit in an existing condominium project which meets such 
standards as the Secretary may prescribe, if the mortgagor quali- 
fies as a displaced family as defined in section 221(f), or a family 
which includes five or more minor persons, or a family occupying 
low-rent public liousing: Provided further^ That the mortgage 
may involve an existing dwelling or a family unit in an existing 
condominiimi project if assistance payments have been made on 
behalf of the previous owner of the dwelling or family unit with 
respect to a mortgage insured under subsection (j) (4) : Provided 
further^ That the mortgage may involve a dwelling unit in an 
existing project covered by a mortgage insured under section 236 
or in an existing project receiving the benefits of financial assist- 
ance under section 101 of the Housing and Urban Development 
Act of 1965; 

(B) where it is to cover a one-family unit in a condominium 
project, have a principal obligation not exceeding $32,000 ^ ($38,- 
000 2 in any geographical area where the Secretary authorizes an 
increase on the basis of a finding that cost levels so require) , ex- 

* Sec. 211(a)(5) of Housing and Community Development Act of 1974, Public Law 
93-383, 88 Stat. 633, approved August 22. 1974, added the words "(including advances with 
respect to property construction or rehabilitation pursuant to a self-help procrram)' . 

2 Sec. 106. Housing and Urban Development Act of 1970, Public Law 91-609, approved 
December 31, 1970, 84 Stat. 1770, 1771, eliminated the requirement at this point that a 
two-family dwelling must be purchased with the assistance of a nonprofit organization in 
order to be eligible for mortgage insurance under section 235. 

• See footnote 1 on following page. 



45-704 0-79-19 281 



§235 NATIONAL HOUSING ACT 

cept that with respect to any family with five or more persons the 
foregoing limits shall be $38,000,^ and $44,000/ respectively ; 

(C) ^ involve, in the case of a dwelling unit other than a condo- 
minium or cooperative unit, a principal obligation including such 
initial service charges, appraisal, inspection, and other fees as the 
Secretary shall approve) in an amount not to exceed $32,000 ^ 

($38,000 ^ in any geographical area where the Secretary authorizes 
an increase on the basis of a finding that cost levels so require ) , 
except that with respect to any family with five or more persons 
the foregoing limits shall be $38,000 ^ and $44,000,^ respectively ; 

(D) involve, in the case of a two-family dwelling, a principal 
obligation (including such initial service charges, appraisal, in- 
spection, and other fees as the Secretary shall approve) in an 
amount not to exceed $44,000 ($49,000 in any geographical area 
where the Secretary authorizes an increase on the basis of a 
finding that cost levels so require) ; and 

(E) 2 be executed by a mortgagor who shall have paid in cash or 
its equivalent, on account of the property, at least an amount 
equal to 3 per centum of the Secretary's estimate of the cost of 
acquisition. 

(j)(l) In addition to mortgages insured under the provisions of 
subsection (i), the Secretary is authorized, upon application by the 
mortgagee, to insure a mortgage (including advances under such 
mortgage during rehabilitation) which is executed by a nonprofit or- 
ganization or public body or agency to finance the purchase of hous- 
ing, and the rehabilitation of such housing if it is deteriorating or sub- 
standard, for subsequent resale to lower income home purchasers who 
meet the eligibility requirements for assistance payments prescribed 
by the Secretary under subsection (b) . Commitments for the insurance 
of such mortgages may be issued by the Secretary prior to the date of 
their execution or disbursement thereon, upon such terms and condi- 
tions as the Secretary may prescribe. 

(2) To be eligible for insurance under paragraph (1) of this sub- 
section, a mortgage shall — 

(A) be executed by a private nonprofit organization or public 
body or agency, approved by the Secretary, for the purpose of 
financing the purchase (with the intention of subsequent resale), 
and rehabilitation where the housing involved is deteriorating or 
substandard, of property comprising one or more tracts or par- 
cels, whether or not contiguous, consisting of (i) four or more 
single-family dwellings of detached, semidetached, or row con- 
struction or (ii) four or more one-family units in a structure or 
structures for which a plan of family unit ownership approved 

1 Sec. 211(c)(2) of Housing and Community Development Act of 1974, Public Law 
93-383, 88 Stat. 633, approved August 22, 1974, substituted "$21,600" for "$18,000"', 
"$25,200" for "$21,000", "$25,200" for "$21,000", and "$28,800" for "$24,000". Prior to 
enactment of Public Law 93-383, sec. 113 (i). Housing and Urban Development Act -^f 
1969, Public Law 91-152. approved December 24, 1969. 85 Stat. 379. 385. substituted 
"$18,000" for "$15,000", "$21,000" for "$17,000", and "$25,000" for "$20,000". Sec. 3(c) 
of the Housing Authorization Act of 1976, Public Law 94-375. approved August 3. 1976, 
90 Stat. 1067, amended section 235(1) (3) (B) of the National Housing Act by striking out 
".$21,600", ".?25,200", "$25,200". and "$28,800" and inserting in lieu thereof "$25,000". 
"$29,000", "$29,000", and "$33,000, respectively ; Housing and Community Development 
Act of 1977, Public Law 95-128, approved October 12, 1977, amended this subsection bv 
striking out, in subsection (i) (3) (B) "$25,000", "$29,000", "$29,000". and "$33,000" and 
inserting in lieu thereof "$32,000", "$38,000", "$38,000", and "$44,000", respectively ; and 
by striking out "and" at the end of subparagraph (B). 

2 Housing and Community Development Act of 1977, P.L. 95-128, October 12, 1977, 
redesignated subparagraph (C) as subparagraph (E) and inserted new subparagraphs as 
set forth in the text. 

282 j 



NATIONAL HOUSING ACT §235 

by the Secretary is established ; except that, in a case not involving 
the rehabilitation of deteriorating or substandard housing the 
property purchased may consist of one or more such dwellings 
or units ; 

(B) be in a principal amount not exceeding the appraised 
value of the property at the time of its purchase under the mort- 
gage plus the estimated cost of any rehabilitation ; 

(C) bear interest (exclusive of premium charges for insurance 
and service charge, if any) at not to exceed such per centum per 
annum (not in excess of 6 per centum), on the amount of the 
principal obligation outstanding at any time, as the Secretary 
finds necessary to meet the mortgage market ; 

(D) provide for complete amortization (subject to paragraph 
(4) (E) ) by periodic payments within such term as the Secretary 
may prescribe ; and 

(E) provide for the release of individual single-family dwell- 
ings from the lien of the mortgage upon their sale in accordance 
with paragraph (4). 

(3) Xo mortgage shall be insured under paragraph (1) unless the 
mortgagor shall have demonstrated to the satisfaction of the Secre- 
tary that (A) the property involved is located in a neighborhood 
wliich is sufficiently stable and contains sufficient public facilities and 
amenities to support long-term values, or (B) the purchase or reha- 
bilitation of such property plus the mortgagor's related activities and 
the activities of other owners of housing in the neighborhood, together 
with actions to be taken by public authorities, will be of such scope 
and quality as to giv^e reasonable promise that a stable environment 
will be created in the neighborhood. 

(4) (A) Xo mortgage shall be insured under paragraph (1) un- 
less the mortgagor enters into an agreement, satisfactory to the Secre- 
tary, that it will offer to sell the dwellings involved, after purchase 
and upon completion of any rehabilitation, to lower income individ- 
uals or families meeting the eligibility requirements established by the 
Secretary under subsection (b). 

(B) The Secretary is authorized to insure under this paragraph 
mortgages executed to finance the sale of individual dwellings to lower 
income purchasers as provided in subparagraph (A). Any such mort- 
gage shall — 

(i) be in a principal amount not in excess of that portion of 
the impaid principal balance of the blanket mortgage covering 
the property which is allocable to the individual dwelling 
involved ; 

(ii) bear interest at the same rate as the blanket mortgage: 
and 

(iii) provide for complete amortization by periodic payments 
within a term equal to the remaining term (determined without 
regard to subparagraph (E)) of such blanket mortgage. 

(C) The price for which any individual dwelling is sold under this 
paragraph shall be in an amount equal to that portion of the unpaid 
principal balance of the blanket mortgage covering the property which 
is allocable to the dwelling plus such additional amount, not less than 
$200 (which may be applied in whole or in part toward closing costs 
and may be paid in cash or its equivalent), as the Secretary may 
determine to be reasonable. 



283 



§235 NATIONAL HOUSING ACT 

(D) Upon the sale under this paragraph of any individual dwelling, 
such dwelling shall be released from the lien of the blanket mortgage. 
Until all of the individual dwellings in the property covered by the 
blanket mortgage have been sold, the mortgagor shall hold and operate 
the dwellings remaining unsold at any given time, in such manner and 
under such terms as the Secretary may prescribe, as though they con- 
stituted rental units. 

(E) Upon the sale under this paragraph of all the individual dwell- 
ings in the property covered by the blanket mortgage and the release 
of all individual dwellings from the lien of the blanket mortgage, the 
insurance of the blanket mortgage shall be terminated and no adjusted 
premium charge shall be charged by the Secretary upon such 
termination. 

(5) Where the Secretary has approved a plan of family unit owner- 
ship the terms "single-family dwelling", "single-family dwellings", 
"individual dwelling", and "individual dwellings" shall mean a family 
unit or family units, together with the undivided interest (or interests) 
in the common areas and facilities. 

(6) For purposes of this subsection, the terms "single-family dwell- 
ing" and "single-family dwellings" (except for purposes of paragraph 
(5)) shall include a two-family dwelling which has been approved 
by the Secretary if one of the units is to be occupied by the owner. 

(7) In addition to the assistance payments authorized under subsec- 
tion (b), the Secretary may make such payments to a mortgagee on 
behalf of a nonprofit organization or public body or agency which 
is a mortgagor under the provisions of paragraph (1) in an amount 
not exceeding the difference between the monthly payment for princi- 
pal, interest, and mortgage insurance premium which the mortgagor 
is obligated to pay under the mortgage and the monthly payment for 
principal and interest such mortgagor would be obligated to pay if the 
mortgage were to bear interest at the rate of 1 per centum per annum. 

(8) A mortgage covering property which is not deteriorating or sub- 
standard may be insured under this subsection only if it is situated in 
an area in which mortgages may be insured under section 221(h). 

(k) The Secretary shall from' time to time allocate and transfer to 
the Secretary of Agriculture, for use (in accordance with the terms 
and conditions of this section) in rural areas and small towns, a reason- 
able portion of the total authority to contract to make assistance pay- 
ments as approved in appropriation Acts under subsection (h) (1). 

(1) In determining the income of any person for the purposes of 
this section, there shall be deducted an amount equal to $300 for each 
minor person who is a member of the immediate family of such person 
and living with such family, and the earnings of any such minor 
person shall not be included in the income of such person or his family. 

(m) ^ No mortgage shall be insured under this section after Octo- 

1 Sec 101(d), Housing and Urban Development Act of 1969, Public Law 91-152, approved 
December 24, 1069, 88 Stat. 37!), added subsection (m), except that the termination date 
for insuring morteaees thereunder was extended from October 1, 1971, to October 1, 1972, 
bv sec 101(d), Housing and Urban Development Act of 1970. Public Law 91-609. approve^d 
December 31 1970, 84 Stat. 1770, and to June 30, 1973, by sec. 1(d) of Public Law 92-503 
approved October 18. 1972, 86 Stat. 906. Sec. 1(d) of Public Law 93-85, approved August 
10 1973 87 Stat. 220, substituted "October 1, 1973" for "June 30, 1973"; sec. 1(d) of 
Public Lkw 93-117, approved October 2. 1973, 87 Stat. 421, substituted "October 1, 1974" 
for "October 1, 197.3". See 211(a) (7) of Housing and Community Development Act of 1974 
Public I aw 93-383, 88 Stat. 633, approved August 22. 1974. substituted ''June 30 1976" 
for ''October 1, 1974". Sec. 3(a) of the Housing Authorization Act of 1976, Pub ic Law 
94-375 approved August 3, 1976, 90 Stat. 1067, amended section 235(m) of the National 
HousinkA?t by striking out "June 30, 1976" and inserting in lieu thereof "September 30. 
1977". 

284 



NATIONAL HOUSING ACT §236 

ber 31, 1979/ except pursuant to a commitment to insure before that 
date. 

(n)2 No mortgage may be insured under this section on a unit in a 
subdivision, after the effective date of enactment of this subsection, 
which, when added to any other mortgages insured under this section 
in that subdivision after such date, represents more than 40 per centum 
of the total number of units in the subdivision, except that the preced- 
ing limitation shall not apply with regard to any rehabilitated unit, 
or to any unit or subdivision located or to be located in an established 
urban neighborhood or area, where a sound proposal is involved and 
where an aggregation of subsidized units is essential to a community 
sponsored overall redevelopment plan, as determined by the Secretary. 

RENTAL AND COOPERATrVT: HOUSING FOR LOV/ER INCOME FA:MILIES 

Sec. 236.' (a) For the purpose of reducing rentals for lower income 
families, the Secretary is authorized to make, and to contract to make, 
periodic interest reduction payments on behalf of the owner of a 
rental housing project designed for occupancy by lower income fami- 
lies, which shall be accomplished through payments to mortgagees 
holding mortgages meeting the special requirements specified in this 
section. 

(b) Interest reduction payments with respect to a project shall only 
be made during such time as the project is operated as a rental housing 
project and is subject to a mortgage which meets the requirements of, 
and is insured under, subsection (j) of this section: Provided^^ That 
the Secretary is authorized to continue making such interest reduction 
payments where the mortgage has been assigned to the Secretary : 
Provided further^ That interest reduction payments may be made with 
respect to a mortgage ^ or part thereof on a rental or cooperative hous- 
ing project owned by a private nonprofit corporation or other private 
nonprofit entity, a limited dividend corporation or other limited divi- 
dend entity, or a cooperative housing corporation, which is financed 
under a State or local program providing assistance through loans, 
loan insurance, or tax abatements, and which ^ may involve either new 
or existing construction and which is approved for receiving the bene- 
fits of this section. The ' term ''mortgage insurance premiums,*' when 
used in this section in relation to a project financed by a loan under a 
State or local program, means such fees and charges, approved by the 
Secretary, as are pa3'able by the mortgagor to the State or local agency 
mortgagee to meet reserve requirements and administrative expenses of 
such agency. 

(c) The interest reduction payments to a mortgagee by the Secre- 

1 Housin;? and Community Development Act of 1977, Public Law 95-128, approved 
Octol)er 12. 1977, deleted "September .30, 1977" and substituted in lieu thereof "Septem- 
ber 30, 1978"'. Amended hy Housing and Community Development Amendments of 1978, 
Sec. 301(d). P.L. 95-557, 92 Stat. 2080, approved October 31, 1978. 

- Housing and Community Development Act of 1977, Public Law 95-128, approved October 
12. 1977. added this subsection. 

•3 Sec. 201(a». Housing and Urban Development Act of 1968, Public Law 90-448, approved 
August 1. 1968. 82 Stat. 476. 498. added sec. 236. 

* This first proviso inserted bv sec. 418(b). Housin^j and Urban Development Act of 
1969. Public Law 91-152. approved December 24. 1969. 83 Stat. 379. 402. 

■ Ser-. lOS. Housing and Urban Development Act of 1969, Public Law 91-1."')2. approved 
December 24. 1969. S3 Stat. 379. 381. Inserted the words '-mortgacre or part thereof on a". 

« See:, lis (a). Housing and Urban Development Act of 1970. Public Law 91-609. approved 
December 31, 1970, 84 Stat. 1770. 1775, substituted "which may Involve either new or 
existing construction and which is approved for receiving the benefits of this section" 
for "which prior to completion of construction or rehabilitation is approved for receiving 
*he benefits of this section". 

• This sentence added bv sec. 108. Housing and Urban Development Act of 1970, Public 
Law 91-609, approved December 31, 1970, 84 Stat. 1770, 1772. 

285 



§236 NATIONAL HOUSING ACT 

tary on behalf of a project owner shall be in an amount not exceeding 
the difference between the monthly payment for principal, interest, and 
mortgage insurance premium which the project owner as a mortgagor 
is obliged to pay under the mortgage and the monthly payment for 
principal and interest such project owner would be obligated to pay 
if the mortgage were to bear interest at the rate of 1 per centum per 
annum. 

(d) The Secretary may include in the payment to the mortgagee 
such amount, in addition to the amount computed under subsection 
(c), as he deems appropriate to reimburse the mortgagee for its 
expenses in handling the mortgage. 

(e) As a condition for receiving the benefits of interest reduction 
payments, the project owner shall operate the project in accordance 
with such requirements with respect to tenant eligibility and rents as 
the Secretary may prescribe. Procedures shall be adopted by the Sec- 
retary for review of tenant incomes at intervals of two years (or at 
shorter intervals where the Secretary deems it desirable). 

(f) (1)^ For each dwelling unit there shall be established with the 
approval of the Secretary (A) a basic rental charge determined on the 
basis of operating the project with payments of principal and interest 
due under a mortgage bearing interest at the rate of 1 per centum per 
annum; and (B) a fair market rental charge determined on the basis 
of operating the project with payments of principal, interest, and 
mortgage insurance premium which the mortgagor is obligated to pay 
under the mortgage covering the project. The rental for each dwelling 
unit shall be at the basic rental charge or such greater amount, not ex- 
ceeding the fair market rental charge, as represents 25 per centum 
of the tenant's income. 

With respect to those projects which the Secretary determines have 
separate utility metering for some or all dwelling units, the Secretary 
is authorized — 

(i) to permit the basic rental charge and the fair market rental 
charge to be determined on the basis of operating the project 
without the payment of the cost of utility services used by such 
dwelling units ; and 

(ii) to permit the charging of a rental for such dwelling units 
at such an amount less than 25 per centum of a tenant's income as 
the Secretary determines represents a proportionate decrease for 
the utility charges to be paid by such tenant, but in no case shall 
such rental be lower than 20 per centum of a tenant's income. 
(2) With respect to 20 per centum of the dwelling units in any 
project made subject to a contract under this section after the date 
of enactment of the Housing and Community Development Act of 
1974, the Secretary shall make, and contract to make, additional assist- 
ance payments to the project owner on behalf of tenants whose incomes 
are too low for them to afford the basic rentals ^ (including the amount 
allowed for utilities in the case of a project with separate utility 
metering) with 25 per centum of their income. The additional assist- 

1 Sec. 212(1) of Housing and Community Development Act of 1974, Public Law 9o-3S3, 
88 Stat. 633, approved August 22, 1974, inserted (1) after (f) and redesignated clauses 
(1) and (2) as (A) and (B) respectively. Sec. 212(2) of such Act also amended Sec. 236. 

2 Sec. 4(b) (1) of the Housing Authorization Act of 1976, Public Law 94-375. approved 
August 3, 1976, 90 Stat. 1067, amended section 236(f) (2) of the National Housing Act bv 
inserting the words "(including the amount allowed for utilities in the case of a project with 
separate utility metering)" and striking the following words "or such lower per centum as 
may be established pursuant to the provisions of clause (Ii) of the last sentence of para- 
graph (1)", and inserting in lieu thereof a "period". 

286 



NATIONAL HOUSING ACT §236 

a nee payments authorized by this paragraph with respect to any 
(iwellinor unit shall l)e the amount required to reduce the rental pay- 
ment ^ (including tlie amount allowed for utilities in the case of a 
project with sepai'ate utility metering) by the tenant to 25 per centum 
of the tenant's income. In no case shall such rental payment be reduced 
below an amount equal to utility costs attributable to the unit occupied 
by tlie tenant, unless the Secretary determines that the application of 
this requirement in any area would result in undue hardship because 
of unusually high utility costs prevailing seasonally or otherwise in 
such area. Notwithstanding the foregoing provisions of this para- 
graph, the Secretary may — 

(A) reduce such '20 per centum requirements in the case of any 
project if he determines that such action is necessary to assure the 
economic viability of the project ; or 

(B) increase such 20 per centum requirement in the case of any 
pi'oject if he determines that such action is necessary and feasible 
in order to assure, insofar as is practicable, that there is in the 
project a reasonable range in the income levels of tenants, or that 
such action is to be taken to meet the housing needs of elderly or 
handicapped faiuilies. 

(3) (A) 2 P'or each project there shall be established an initial operat- 
ing expense level, which shall be the sum of the cost of utilities and 
local pioperty taxes payable by the project owner at the tinie the Secre- 
tury determines the ])roperty to be fully occupied, taking into account 
anticipated and customary vacancy rates. For each fiscal year prior to 
the fiscal year 1979. the Secretary is authorized to make, and shall con- 
tract to make to the extent of the moneys in the reserve fund established 
under subsection (g) and to the further extent of funds authorized in 
appropriation Acts, an additional monthly assistance payment to the 
project owner up to the amount by which the sum of the cost of utili- 
ties and local pro])erty taxes exceeds the initial operating expense level. 
Such payment shall be used by the project owner solely to effect, and 
there shall be, a reduction in the basic rental charges established for 
the project . Any conti-act to make additional monthly assistance pay- 
ments shall be foi- a one-year period and shall be adjusted periodically 
to provide, to the extent approved in appropriation Acts, for continua- 
tion of the payments and for an appropriate adjustment in the amount 
of the assistance payments.^ 

Any contract to make additional assistance payments may be 
amended i)eriodicallv to provide for appropriate adjustments in the 
amount of the assistance payments. Additional assistance payments 
sliall be made pursuant to this paragraph unless the Secretary finds 
that the increase in the cost of utilities or local property taxes is not 



1 Sec. 4(b)(2) of the Housing Authorization Act of 1070, Public Law 94-37o, approved 
Aucust 3. 1976, 90 Stat. 10fi7, amended this section by inserting in the second sentence the 
words "(including the amount allowed for utilities In the case of a project with separate 
utility metering)" and inserting a period after "tenant's Income" and striking "or such lower 
per centum as may be established pursuant to the provisions of clause (ii) of the last sen- 
tence of paragraph (1)". 

- This section was substantially revised by Housing and Community Development Amend- 
ments of 1978. Sec. 201(1). P.L. 9o-r)r)7. 92 Stat. 2080 (1978). Designation "(A)" was 
inserted after the "(3)"; "The" beginning the second sentence was stricken and re- 
placed with "For each fiscal year prior to the fiscal year 1979, the", and a new section 
(B) was added. The provisions are to become eflfective on October 1, 1978. 

3 Amended by Housing and Community Development Act of 1977, Public Law 95-128. 
approved October 12. 1977. section 200 (d) of the Housing and Community Development 
Act of 1977 also provides that the amendments made by this section shall become effective 
on October 1, 1977, and shall apply to assistance payments pursuant to section 236(f) (3) of 
the Nat'l. Housing Act with respect only to periods commencing on or after such date. 

287 



§236 NATIONAL HOUSING ACT 

rfii^onable or not comparable to cost increases affecting other rental 
projects in the community. 

(B) The Secretary shall utilize amounts credited to the fund de- 
scribed in subsection (g) on or after October 1, 1978, for the sole pur- 
pose of carrying out the purposes of section 201 of the Housing and 
Community Development Amendments of 1978. No payments may be 
made from such fund unless approved in an appropriation Act. No 
amount may be so approved for any fiscal year beginning after Sep- 
tember 30, 1979. 

(g) The project owner shall, as required by the Secretary, accumu- 
late, safeguard, and periodically pay to the Secretary all rental 
charges collected in excess of the basic rental charges. Such excess 
charges shall be credited to a reserve fund to be used by the Secretary 
to make additional assistance payments as provided in paragraph 
(3) of subsection (f).^ 

(h) In addition to establishing the requirements specified in sub- 
section (e) , the Secretary is authorized to make such rules and regula- 
tions, to enter into such agreements, and to adopt such procedures as 
he may deem necessary or desirable to carry out the provisions of this 
section. 

(i) (1) There are authorized to be appropriated such sums as may 
be necessary to carry out the provisions of this section, including such 
sums as may be necessary to make interest reduction payments under 
contracts entered into by ^ the Secretary under this section. The aggre- 
gate amount of outstanding ^ contracts to make such payments shall 
not exceed amounts approved in appropriation Acts,* and payments 
pursuant to such contracts shall not exceed $75,000,000 per annum 
prior to July 1, 1969, which maximum dollar amount shall be increased 



1 Sec. 212(3) of Housing and Community Development Act of 1974, Public Law 93-383, 
fsS Stat. 683, approved August 22, 1974, substituted a new section (g). Amended by Hous- 
ing and Community Development Act of 1977. Public Law 95-128, approved October 12, 
1977. section 206(d) of the Housing and Community Development Act of 1977 also pro- 
vides that the 'auiendments made by this section shall become effective on October 1. 1977, 
and shall apply to assistance payments pursuant to section 236(f)(3) of the National 
Housing Act with respect only to periods commencing on or after such date." The last two 
sentences of section (g) were repealed by the Housing and Community Development Amend- 
ment of 1978, section 201 (i), P.L. 95-557, 92 Stat. 2080 (1978) ; effective October 1, 1978. 
These sentences read as follows : 

"During any period that the Secretary determines that the balance in the reserve fund 
is adequate to meet the estimated additional assistance payments, such excess charges shall 
be credited to the appropriation authorized by subsection (i) and shall be available until 
the end of the next fiscal year for the purpose of making assistance payments with respect 
to rental housing projects receiving assistance under this section. For the purpose of this 
subsection and paragraph (3) of subsection (f), the initial operating expense level for any 
project assisted under a contract entered into prior to the date of enactment of the Hous- 
ing and Community Development Act of 1977 shall be established by the Secretary not 
later than 180 days after the date of enactment of such Act." 

2 Sec. 121(b), Housing and Urban Development Act of 1970, Public Law 91-609, approved 
December 31, 1970, 84 Stat. 1770. 1776. inserted "by the Secretary". 

3 Sec. 102(b)(1), Housing and Urban Development Act of 1970, Public Law 91-609, 
approved December 31, 1970. 84 .^tat. 1770, inserted "outstandine". 

* Th« Supplemental Appropriation Act, 1969, Public Law 90-608, approved October 21, 
196S, 82 Stat. 1190. 1193, provided that the total payments that may be required in any 
fiscal year by all contracts entered Into under sec. 236 shall not exceed ^25,000,000. 

The Second Supplemental Appropriation Act. 1969, Public Law 91-47, approved July 22, 

1969, 83 Stat. 49. 53, Increased by .«45,000,000 the limitation on total payments that may 
be required in any fiscal year by all contracts entered into under sec. 236. 

The Independent Offices and Department of Housiner and Urban Development Appropria- 
tion Act. 1970. Public Law 91-126. approved November 26, 1969, 83 Stat. 221, 238, in- 
creased this limitation by $85,000,000. 

The Second Supplemental Appropriation Act, 1970. Public Law 91-305, approved July 6, 

1970, 84 Stat. 376. 379, increased this limitation by $35,000,000, and the Independent 
Offices and Department of Housing and Urban Development Appropriation Act. 1971, 
Public Law 91-556, approved December 17, 1970, 84 Stat. 1442, 1458, further increased 
this limitation by $135,000,000. 



288 



NATIONAL HOUSING ACT §236 

bv $125,000,000 ^ on July 1. 1969, by $150,000,000 on July 1, 1970, by 
$200,000,000 on July 1, 1971, and by $75,000,000 on July 1, 1974.^ 

(2) Contracts for assistance payments under this section may be 
entered into only ^vith respect to tenants whose incomes do not exceed 
80 per centum of the median family income for the area, as determined 
by tlie Secretary with adjustments for smaller and larger families, 
except that the Secretary may establish income ceilings higher or 
lower than 80 per centum of the median for the area on the basis of 
his findings that such yariations are necessary because of preyailing 
leyels of construction costs, unusually high or low family incomes, 
or other factors. 

(3) Xot less than 10 per centum of the total amount of contracts 
for assistance payments authorized by appropriation Acts to be made 
after June 30, 1974, shall be ayailable for use only with respect to 
dwellings, or dwelling units in projects, which are approved by the 
Secretary prior to rehabilitation. 

(4) At least 20 per centum of the total amount of contracts for 
assistance payments authorized in appropriation Acts to be made 
after June 30, 1974, shall be available for use only with respect to proj- 
ects which are planned in whole or in part for occupancy by elderly 
or handicapped families. As used in this paragraph the term "elderly 
families" means families which consist of two or more persons the 
head of which (or his spouse) is sixty-two years of age or over or is 
handicapped. Such term also means a single person who is sixty-two 
years of age or over or is handicapped. A person shall be considered 
handicapped if such person is determined pursuant to regulations 
issued by the Secretary to have an impairment which (A) is expected 
to be of long-continued and indefinite duration (B) substantially im- 
pedes his ability to live independently, and (C) is of such a nature 
that such ability could be improved by more suitable housing 
conditions.- 

(j) (1) The Secretary is authorized, upon application by the mort- 
gagee, to insure a mortgage (including advances on such mortgage 
during construction) which meets the requirements of this subsec- 
tion.^ Commitments for the insurance of such mortgages may be issued 
by the Secretary prior to the date of their execution or disbursement 
thereon, upon such terms and conditions as he may prescribe. 

iSec. 107(b). Housing and Urban Development Act of 1969, Public Law 91-152, ap- 
proved December 24. 1969. 83 Stat. 379, 38. substituted "$125,000,000 on July 1. 1969," 
for "$100,000,000 on Julv 1. 1969," and sec. 102(b)(2), Housing and Urban Development 
Act of 1970. Public Law" 91-609. approved December 31. 1970. 84 Stat. 1770. substituted 
"$150,000,000 on Julv 1. 1970, and b $200,000,000 on July 1. 1971." for "$125,000,000 on 
Julv 1. 1970. and bv $170,000,000 on Julv 1. 1971". Sec. 212(4) of Housing and Community 
Development Act of 1974, 88 Stat. 633. approved August 22, 1974, substituted ' by 
$200,000,000 on July 1. 1971, and by $75,000,000 on July 1. 1974" for "and by $200,000,000 

2'sec. 212(5) of Housing and Community Development Act of 1974. Public Law 93-383. 
88 Stat. 63.S, approved August 22, 1974. substituted"new paragraphs "(2), (3) and (4)" for 

■'Subsections 21(c) and 201(d). Housing and Urban Development Act of 1968. Public 
Law 90-448. approved August 1, 1968, 82 Stat. 476, 502, also provide : 

"(c) The Secretnry of Housing and Urban Development is authorized, upon such terms 
and conditions as he may prescribe, to transfer to section 236 (.i) of the National Housing 
Act the insurance of a mortsrage which has not be [sic] finallv endorsed for insurance under 
section 221(d)(3) of such Act and which has been approved for the below-market interest 
rate prescribed in the provi'jo of section 221 fd) (5) of such Act." 

"(d) The Secretary of Housing and Urban Development is authorized, upon such terms 
and con-.litinns as he may prescribe, to insure under section 236(j^ of the National Housing 
Act a mortcracre meeting the requirements of such section which is given to refinance a 
m.ortgage loan made under f\ection 202 of the Housing Act of 10.o9 : Provided, That the 
application for such insurance is filed with the Secretary on or before the date of project 
completion, or within such reasonable time thereafter as the Secretary may permit. 

Section 201(e) (3), Housing and Urban Development Act of 1968, also amended sec. 101, 
Housing and Urban Development Act of 1965, infra, to permit up to 20 percent of the units 
In anv one project to be occupied by tenants receiving rent supplement benefits under 
sec. 161 of the 1965 Act. 

289 



§236 NATIONAL HOUSING ACT 

( 2 ) As used in this subsection — 

(A) the terms "family" and "families" shall have the same 
meaning as in section 221 ; 

(B) the term "elderly or handicapped families" shall have the 
same meaning as in section 202 of the Housing Act of 1959 ; and 

( C ) the terms "mortgage", "mortgagee", and "mortgagor" shall 
have the same meaning as in section 201. 

(3) To be eligible for insurance under this subsection, a mortgage 
shall meet the requirements specified in subsections (d) (1) and (d) (3) 
of section 221, except as such requirements are modified by this sub- 
section. In the case of a project financed with a mortgage insured 
under this subsection which involves a mortgagor other than a cooper- 
ative or a private nonprofit corporation or association and which is 
sold to a cooperative or a nonprofit corporation or association, the Sec- 
retary is further authorized to insure under this subsection a mortgage 
given by such purchaser in an amount not exceeding the appraised 
value of the property at the time of purchase, which value shall be 
based upon a mortgage amount on which the debt service can be met 
from the income of the property when operated on a nonprofit basis, 
after payment of all operating expenses, taxes and required reserves. 

(4) A mortgage to be insured under this subsection shall — 

(A) be executed by a private mortgagor eligible under subsec- 
tion (d) (3) or (e) of section 221 ; 

(B) bear interest (exclusive of premium charges for insurance 
and service charges, if any) at not to exceed such per centum per 
annum (not in excess of 6 per centum), on the amount of the 
principal obligation outstanding at any time, as the Secretary 
finds necessary to meet the mortgage market; and 

(C) provide for complete amortization by periodic payments 
within such term as the Secretary may prescribe. 

(5) The property or project shall — 

(A) comply with such standards and conditions as the Secre- 
tary may prescribe to establish the acceptability of the property 
for mortgage insurance and may include such nondwelling facili- 
ties as the Secretary deems adequate and appropriate to serve the 
occupants and the surrounding neighborhood : Provided^ That the 
project shall be predominantly residential and any nondwelling 
facility included in the mortgage shall be found by the Secretary 
to contribute to the economic feasibility of the project, and the 
Secretary shall give due consideration to the possible effect of the 
project on other business enterprises in the community : Provided 
further^ That, in the case of a project designed primarily for 
occupancy by elderly or handicapped families, the project may in- 
clude related facilities for use by elderly or handicapped families, 
including cafeterias or dining halls, community rooms, workshops, 
infirmaries, or other inpatient or outpatient health facilities, and 
other essential service facilities ; 

(B) include five or more dwelling units, but ^ such units, in the 
case of a project designed primarily for occupancy by displaced, 
elderly, or handicapped families, need not, with the approval of 
the Secretary, contain kitchen facilities ; and 



1 Sec. 115(b) (1), Honsinpr and Urban Development Act of 1970, Public Law 91-609, ap- 
proved December 31, 1970, 84 Stat. 1770, 1774. inserted ", but such units, in the case of a 
project desigrned primarily for occupancy by displayed, elderly, or handicapped families* 
need not. with the approach of the Secretary, contain kitchen facilities". 

290 



NATIONAL HOUSING ACT §236 

(C) be designed primarily for use as a rental project to be occu- 
pied by lower income families or by elderly or handicapped fam- 
ilies: Provided^ That lower income persons who are less than 
sixty-two years of age shall be eligible for occupancy in such a 
project.^ In ^ any case in which it is determined in accordance with 
regulations of the Secretary that facilities in existence or under 
construction on the date of enactment of the Housing and Urban 
Development Act of 1970 which could appropriately be used for 
classroom purposes are available in any such property or project 
and that public schools in the community are overcrowded due in 
part to the attendance at such schools of residents of the property 
or project, such facilities may be used for such purposes to the ex- 
tent permitted in such regulations (without l)eing subject to any of 
the requirements of the first proviso in subparagraph (A) except 
tlie requirement that the project be predominantly residential). 
(6) AVitii the approval of the Secretary, the mortjjfagor may sell 
the individual dwelling units to lower income or elderly or handi- 
capped purchasers. The Secretary may consent to the release of the 
moi-t«ragor from his liability under the mortgage and the credit instru- 
w.i^vA ser-ured tliereby. or consent to the release of parts of the mort- 
gaged property from tlie lion of the mortgage, upon such terms and 
conditions as he may prescribe, and the mortgage may provide for s^k^Ii 
reJense. 

fk) As used in this section the term "tenant" includes a member of 
a cooperative: the term ''reutal housing project*' includes a cooperative 
housing project: and the terms ''rental" and "rental charge'' mean, 
with respect to members of a cooperative, th.e charires under the o -cu- 
pau'^y agreements ]:)etvveen such members and the cooperative. 

(1) Tlie Secretary slipll from time to time allocate and transfer to 
tlie Secrotary of AirricnltuT'o, for use (in accordai^ce with tlie terms 
and conditions of tliis section) in rural areas and small towns, a rea- 
sonable portion of tlie total authority to contract to make periodic 
interest reduction payments as approved in appropriation Acts under 
subsection (i). 

(m) In determining the income of any pei'son for the purposes of 
this section, tliere shall be deducted an amount equal to ^300 for each 
minor person who is a memV)er of \}\^ immedia"'e family of such person 
and living with such family, and the earnings of any such minor per- 
son shall not be included in thie income of such person or his family, 
(n)^ No mortgage shall be insured under this section after September 
30, 1979 3 except pursuant to a commitment to insure before that date. 

* iSec. 4(b) of Public Law 94-173. 89 Stat. 1027 approved December 23 1975 deleted 
the words " but not more than 10 per centum of the dwelling units in any such proj^t 
shall be available for occupancy by such persons" In the proviso to subparagraph (L) or 
sec. 23G(j) (5) of the National Housino: Act. o x- u t^ i^r.rr,«T,i- Ap<- nf 1Q70 

a This sentence added by sec. 114(b). Housing and Urban Development Act of 1970, 
•Public Law 91-609, approved December 31, 1970, 84 Star. 1770, 1775. 

3 soo lOHe) Housinir and Urban Develnnment Act of 1969. Public Law 91-lo2. ap- 
provprl Dp'-PMihpr 24 1960. S3 St.-.t. 379. ndded subsection fnK except that_the tenmnation 
d.iTo f.,r insuring morttraprs tlierennder was extended from Ocfober 1. in<l. to ^-''qi 7nq 
l;.7:. bv soc. 101(e). Hou^injr ;;nd Urban Development Art of 19.0 P"'^li^, /-'^^.^J,-^'^?- 
.nnproved December 31. 1970. S4 Stat 1770. and to June 30 19.3, by sec. l(e of P"' ''f 
L-.w ^?-.-,03. pnnrovod October 1 '^. 1972. SO ?!tat. 906: to October 1. 19.3 b^. ^^f- / '5.» 




Public Law 95-12S. approved October 12. 1977. substituted ' September 30, 19 . 
"September 30, 1977". Amended further by Section 301(e) of the housing and Community 
Development Amendments of 1978, P.L. 95-557. 29 Stat. 2080, approved October 31. 1978. 

291 



§237 



NATIONAL HOUSING ACT 



(o)^ The Secretary is authorized to enter into agreements with any 
State or agency thereof under which such State or agency thereof con- 
tracts to make interest reduction payments, subject to all the terms and 
conditions specified in diis section and in rules, regulations and proce- 
dures adopted by the Secretary under this section, with respect to all or 
a part of a project covered by a mortgage insured under this section. 
Any funds provided by a State or agency thereof for the purpose of 
making interest reduction payments shall be administered, disbursed 
and accounted for by the Secretary in accordance with the agreements 
entered into by the Secretary with the State or agency thereof and for 
such fees as shall be specified therein. Before entering into any agree- 
ments pursuant to this subsection the Secretary shall require assurances 
satisfactory to him that the State or agency thereof is able to provide 
sufficient funds for the making of interest reduction payments for the 
full period specified in the interest reduction contract. 

(p) The Secretary is authorized to enter into contracts with State 
or local agencies approved by him to provide for the monitoring and 
supervision by such agencies of the management by private sponsors 
of projects assisted under this section. Such contracts shall require 
that such agencies promptly report to the Secretary any deficiencies 
in tlie management of such projects in order to enable the Secretary 
to take corrective action at the earliest practicable time.^ 

SPECIAL MORTGAGE INSURANCE ASSISTANCE 

Sec. 237.2 (a) The purpose of this section is to help provide adequate 
housing for families of low and moderate income, including those who, 
for reasons of credit history, irregular income patterns caused by sea- 
sonal employment, or other factors, are unable to meet the credit 
requirements of the Secretary for the purchase of a single-family home 
financed by a mortgage insured under section 203, 220, 221, 234, or 
235 (j) (4), but who, through the incentive of homeownership and 
counseling assistance, appear to be able to achieve homeownership. 

(b) The Secretary is authorized upon application by the mortgagee 
to insure under this section any mortgage meeting the requirements of 
this section. 

(c) To be eligible for insurance under this section, a mort^ajre 
shall— ' ^ "^ 

(1) meet the requirements of section 203 (except subsection 

^^JM ff?^^^ (^^ (^)' ^^^(^) (2)' 221(h) (^)' 221(1), 234(c), or 
^^^(])(4), except as such requirements are modified by this 
section ; 

^ (2) involve a principal obligation (including such initial serv- 
ice charges and such apprai-al. inspection, and other fees, as the 
Secretary shall approve) in an amount not to exceed $18,000 ; ^ 
Provided, That the Secretary may increase the amount to not 
exceed $21,000 * in any geographical area where he finds that cost 



1 Sec. 121(a), Housing and Urban Development Act of 1970, Public Law 91-609, approved 
December 31, 1970, 84 Stat. 1770, 1776. added subsection (o) but by error this subsection 
was printed in the slip law as subsection (n). 

2 Sec. 212(7) of the Housing and Community Development Act of 1974, 88 Stat. 633, 
approved August 22, 1974, added this paragraph. 

3 Sec. 102(a), Housing and Urban Development Act of 1968, Public Law 90-448, approved 
August 1, 1968, 82 Stat. 476, 485, added sec. 237. 

'' Sec. 113 (j), Housing and Urban Development Act of 1969, Public Law 91-152, approved 
December 24. 1969, 83 Stat. 379, 385, substituted "$18,000" for "$15,000" and "$21,000" 
for "$17,500". 

292 



NATIONAL HOUSING ACT §237 

levels so require : Frovided furtfier. That no mortgage meeting the 
requirements of section 203(h) or 203 (i) shall be eligible for in- 
surance under this section if its principal obligation is in excess of 
the maximum limits prescribed in such section ; 

(3) be executed by a mortgagor who the Secretary has deter- 
mined, after a full and complete study of the case, would not be 
an acceptable credit risk for mortgage insurance purposes under 
sections 203, 220, 221, 234, or 235(j)(4), because of his credit 
standing, debt obligations, total annual income, or income char- 
acteristics but who the Secretary is satisfied would be a reason- 
ably satisfactory credit risk, consistent with the objectives stated 
in subsection (a), if he were to receive budget, debt management, 
and related counseling : Provided^ That, in determining whether 
the mortgagor is a reasonably satisfactory credit risk, the Secre- 
tary shall review the credit history of the applicant giving special 
consideration to those delinquent accounts which were ultimately 
paid by the applicant and to extenuating factors which may have 
caused credit accounts of the applicant to become delinquent; and 
the Secretary shall also give special consideration to income char- 
acteristics of applicants whose total income over the two years 
prior to their applications has remained at levels of eligibility (as 
required under paragraph (4) of this subsection), but who, be- 
cause of the character of their seasonal employment or for other 
reasons, have not maintained continuous employment under one 
employer during that time ; and 

(4) require monthly payments which, in combination with 
local real estate taxes on the property involved, do not exceed 25 
per centum of the applicant's income, based on his average 
monthly income during the year prior to his application or the 
average monthly income during the three years prior to his ap- 
plication, whichever is higher. 

(d) The Secretary shall give preference in approving mortgage 
insurance applications and ^ in providing counseling services under 
this section (1) to ^ families which are eligible for assistance payments 
under section 235, and (2) to families living in public housing units, 
especially those families required to leave public housing because their 
incomes have risen beyond the maximum prescribed income limits, and 
families eligible for residence in public housing who have been dis- 
placed from federally assisted urban renewal areas. 

(e) The Secretary is authorized to provide, or contract with public 
or private organizations to provide, such budget, debt management, 
and related counseling services to mortgagors whose mortgages are 
insured under this section as he determines to be necessary to meet 
the objectives of this section. The Secretary may also provide such 
counseling to otherwise eligible families who lack sufficient funds to 
supply a down payment to help them to save an amount necessary for 
that purpose. 

(f ) The aggregate principal balance of all mortgages insured under 
this section and outstanding at one time shall not exceed $200,000,000. 

(g) There are authorized to be appropriated such sums as may be 
necessary to carry out the provisions of subsection (e) of this section. 



1 Sec. 110. Housing and Urban Development Act of 1969, Public Law 91-152, approved 
December 24, 19G9. R3 Staf379, 382, inserted "and in providing counseling services and 
further amended subsection (d) to include families eligible for section 235 homeownersbip 
assistance among the applicants who are to be given a preference for mortgage insurance 
and counseling services. 

■ 293 



§238 NATIONAL HOUSING ACT 

PAYMENT OF INSURANCE SPECIAL RISK INSURANCE FUND 

Sec. 238.^ (a) (1) Any mortgagee under a mortgage insured under 
section 235 (i), 235 (j) (4), 237, or 243 shall be entitled to receive the 
benefits of the insurance as provided in section 204(a) with respect to 
mortgages insured under section 203. The provisions of subsections 
(b), (c), (d), (g), (j), and (k) of section 204 shall be applicable to 
mortgages insured under section 235 (i), 235(j) (4), 237, or 243, except 
that all references therein to the "Mutual Mortgage Insurance Fund" 
shall be construed to refer to the "Special Eisk Insurance Fund", and 
all references therein to section 203 shall be construed to refer to section 
235 (i) , 235 ( j ) (4) , 237, or 243, as may be appropriate. 

(2) Any mortgagee under a mortgage insured under section 235 
(j) (1) or 236 shall be entitled to receive the benefits of insurance as 
provided in section 207(g) with respect to mortgages insured under 
section 207. The provisions of subsections (d), (e), (h), (i), (j), (k), 
(1), and (n) of section 207 shall be applicable to mortgages insured 
under section 235 (j) (1) or 236, except that all references therein to 
the "General Insurance Fund" shall be construed to refer to the "Spe- 
cial Kisk Insurance Fund" and the premium charge provided in section 
207(d) shall be payable only in cash or debentures of the Special Risk 
Insurance Fund. 

(3) In lieu of the amount of insurance benefits computed pursuant 
to paragraph (1) or (2) of this subsection the Secretary, in his dis- 
cretion and in accordance with such regulations as he may prescribe, 
may (with respect to any mortgage loan acquired by him) compute 
and pay insurance benefits to the mortgagee in a total amount equal 
to the unpaid principal balance of the loan plus any accrued intei'est 
and any advances approved by the Secretary and made previously by 
the mortgagee under the provisions of the mortgage. 

(b) There is hereby created a Special Risk Insurance Fund (here- 
inafter referred to as the "fund") which shall be used by the Sec- 
retary as a revolving fund for carrying out the mortgage insurance 
obligations of sections 223(e), 233(a) (2), 235, 236, 237, and 243, and 
the Secretary is hereby authorized to advance to the fund, at such times 
and in such amounts as he may determine to be necessary, a total sum of 
$20,000,000 2 from the General Insurance Fund established pursuant 
to the provisions of section 519. Such advance shall be repayable at such 
times and at such rates of interest as the Secretary deems appropriate. 
Premium charges, adjusted premium charges, inspection and other 
fees, service charges, and any other income received by the Secretarv 
under sections 223(e), 233(a) (2), 235, 236, and 237, together with all 
earnings on the assets of the fund, shall be credited to the fund. All 
payments made pursuant to claims of mortgagees with respect to 
mortgages insured under sections 233(a) (2), 235, 236, 237, and 243 or 
pursuant to section 223(e), cash adjustments, the principal of and 

1 Sec. 104(a), Housing and Urban Development Act of 1968, Public Law 90-448, approved 
August 1, 1968, 82 Stat: 476, 486, added sec. 238, except for the reference to sec. 243 wnicn 
was Inserted by sec. 503, Emergency Home Finance Act of 1970, Public Law 91-351, ap- 
proved .Tuly 24, 1970, 84 Stat. 450, 461, and also an additional amendment by sec. 117(d) 
of the Housing and Urban Development Act of 1970. noted on the next page. 

- Sec. 415, Housing and Urban Development Act of 1969, Public Law 91-152 approved 
December 24, 1969, 83 Stat. 379. 401, increased from $5,000,000 to $20,000,000 the- 
amount which the Secretary of HUD is authorized to advance from the General Insurance 
Fund to the Special Risk Insurance Fund. 



294 



NATIONAL HOUSING ACT §238 

interest paid on debentures which are the obligation of the fund, ex- 
penses incurred in connection with or as a consequence of the acquisi- 
tion and disposal of property acquired under such sections, and all 
administrative expenses in connection with the mortgage insurance 
operations under such sections shall be paid out of the fund. There is 
authorized to be appropriated such sums as may be needed from time to 
time to cover losses sustained by the fund in carrying out the mortgage 
insurance obligations of sections 223(e), 233(a), 235, 236, 237, or 243. 
Moneys in the fund not needed for current operations of the fund shall 
be deposited with the Treasurer of the United States to the credit of the 
fund or invested in bonds or obligations of, or in bonds or other obli- 
oations guaranteed by, the United States or^ any agency of the • 
United States: Provided^ That such moneys shall to the maximum 
extent feasible be invested in such bonds or other obligations the 
proceeds of which will be used to directly support the residential mort- 
gage market. The Secretary, with the approval of the Secretary of 
Ilie Treasury, may purchase in the open market debentures which 
ai-e the obligation of the fund. Such purchases shall be made at a price 
wliich will provide an in.vestment yield of not less tlian the yield ob- 
tained from other investments authorized by this section. Debentures 
so purchased shall be canceled and not reissued. 

(c)(1) Xotwithsfunding the j^rovisions of this or any other Act, 
and without regard to limitations upon eligil/ility contaip'-d in any 
section of this title, the Secretary is autliorizod, upon application by 
the mortgagee, to iiisure under any section of this title a mortgage 
execiitedni connection Avith the construction, repair, rehal)ilitatio]i, (;r 
])urchase of property located near any installation of tlie Armed 
Forces of the United States in federally impacted areas in whicli the 
conditions are such that one or more of the eligibility requirements 
applicable to the section under vrhich insurance is sought could not 
be met, if (A) the Secretary finds that the benefits to l)e derived from 
such use outv.eigh the ri?k of probable cost to the Government, and 
(B) i\\e Secretary of Defense certifies that there is no intention inso- 
far as can reasonably be foreseen to curtail substantially the personnel 
assigned or to be assigned to such installation. The insurance of a 
mortgage pui'suant to this subsection shall be the obligation of the 
Special Risk Insurance Fund. 

(2) The Secretary is authorized (A) to establish such premiums 
and other charges as may be necessary to assure that the mortgage 
insurance program pursuant to this subsection is made available on a 
basis which, in the Secretary's judofment, is designed to be actuarially 
sound and likelv to maintain the fiscal inteirrity of such program, and 
(B) to prescribe such terms and conditions relating to insurance 
pursuant to this subsection as may be found by the Secretary to be 
neces<arv and appropriate, and which are to the maximum extent 
possible," consistent with provisions otlierwise applicable to mortgage 
insurance and payment of insurance benefits.^ 



1 Sec. 117(d). Housing and Urban Development Act of 1970, P«bUc Law 91-609, approved 
December 31. 1970, 84 Stat. 1770. 1775, added the remainder of this sentence. 

a Sec. 318, Honsinjr and Community Dprolopmont Act of 1074 Public Law 93-3S.^.J^^ 
Ntat. (>3:i. approved August' 22. 1074 added this new subsection to sec. 238 .Housing ana 
Communitv Devolopmont Act of 1977, Public Law 95-128, approved October lA 1J<^ 



anifiidod this section as set forth in the t^xt. 

295 



§240 NATIONAL HOUSING ACT 

MODIFICATIONS IX TER^.IS OF IXSIRKD :m:ORTGAGES COITEKING 
MULTIFAMILY PROJECTS 

Sec. 239.^ (a) The Secretary shall not consent to any request for 
an extension of the time for curin^^ a default under any mortgage cov- 
ering nui'tifamily housing, as defined i]i the regulations of the Secre- 
tary, or for a modification of the terms of such mortgage, except in 
conformity with regulations prescribed by the Secretary in accordance 
with the provisions'of this section. Such regulations shall require, as a 
condition to the granting of any such request, that, during the period 
of such extension or modification, any part of the rents or other funds 
derived by the mortgagor from the property covei-ed by the mortgage 
which is not required to meet actual and necessary expenses arising in 
connection with the operation of such property, including amortiza- 
tion charges under the mortgage, be held in trust by the mortgagor 
and distributed only with the consent of the Secretary; except that 
the Secretary may provide for the granting of consent to any request 
for an extension of the time for curing a default under any mortgage 
covering multifamily housing, or for a modification of the terms of 
such mortgage, without regard to the foregoing requirement, in any 
case or class of cases in which an exemption from such requirement 
does not (as determined by the Secretary) jeopardize the interests of 
the United States. 

(b) Whoever, as an owner of a property which is security for a mort- 
gage described in subsection (a), or as a stockholder of a corporation 
owning such property, or as a beneficial owner under any business 
organization or trust owning such property, or as an officer, director, 
or agent of any such owner, (1) willfulh' uses or authorizes the use of 
any part of the rents or other funds derived from property covered 
by such mortgage in violation of a regulation prescribed by the Secre- 
tary under subsection (a), or (2) if such mortgage is determined, as 
])i'ovided in subsection (a), to be exempt from the requirement of any 
such regulation or is not otherwise covered by such regulation, will- 
fully and knowingly uses or authorizes the use, while such mortgage 
is in default, of any part of the rents or other funds derived from 
the property covered by such mortgage for any purpose other than to 
meet actual and necessary expenses arising in connection with such 
property (including amortization charges under the mortgage), shall 
be fined not more than $5,000 or imprisoned not more than three years, 
or both. 

PURCHASE OF FEE SIINIPLE TITLE FROM LESSORS 

Sec. 240.2 (a) The Secretary is authorized, upon such terms and 
conditions as he may prescribe, to make commitments to insure ancl to 
insure loans made by financial institutions for the purpose of financing 
purchases by homeowners of the fee simple title to property on which 
their homes are located. 

(b) As used in this section — 

(1) the term "financial institution" means a lender approved 
by the Secretary as eligible for insurance under section 2 or a 
mortgagee approved under section 203(b) (1) ; and 

(2) the term "homeoAvner" means a lessee under a long-term 
ground lease. 

1 Section 302, Housing and Urban Development Act of 1968, Public Law 90-448, approved 
August 1. 1968, 82 Stat. 476, 506, added sec. 239. ^^ ..„ 

2 Sec. 304(a), Housing and Urbar Development Act of 1968, Public Law 90-448, approved 
August 1, 1968, 82 Stat. 476, 507, added sec. 240. 

296 



NATIONAL HOUSING ACT §241 

((•) 'JV:) bo cliirible for iiipurance under this poction, a loan sliall — 

(1) relate to pi'opcrty on wliich theie is located a dwelling 
desiaiu-d priiK'ipally I'oi- a one-, two-, three-, or four-family 
residence ; 

(2) not exceed the c(^st of purchasinir the fee simple title, or 
$10,()()() ($80,()()0, if the property is located in Hawaii)^ per family 
unit, Avhichevei- is the lesser : 

(•"M be limited to an amount which when added to any out- 
standing indebtedness related to the property (as determined by 
the Secretary) creates a total outstandinof indebtedness wliich does 
not exceed the applicable mortgage limit prescribed in section 
2();Wb); 

(4) bear interest at not to exceed such per centum per annum 
(not in excess of 6 per centum), on the amount of the principal 

obligation outstanding at any time, as the Seci-etary finds neces- 
sary to meet market conditions, and such other charges (including 
service charges and appraisal, inspection, and other fees) as may 
be appioved by the Secretary ; 

(5) have a maturity satisfactory to the Secretary, but not to 
exceed twenty years from the beginning of amortization of the 
loan or thi-ee-(|uarters of the remaining economic life of the home, 
whichevei- is the less(M*; and 

(()) comply with such other terms, conditions, and restrictions 
as the Secretary may prescribe, 
(d) The provisions of paragraphs (3), (5), (6), (7), (8), and 
(10) of section 220(h) shall be applicable to loans insured under this 
section and, as applied to loans insured under this section, references 
in those paragrai)hs to "home improvement loans*' and ''this subsec- 
tion" shall be construed to refer to loans under this section. 

supri.E:MEXTAL LOAxs FOR multifa:mily tkojects 

Sec. 241.^ (a) With respect to a multifamily project, hospital.^ or 

group practice facility covered by a mortgage insured under any sec- 
tion or title of this Act or covered by a mortgage held by the Secretary, 
the Secretary is authorized, upon such terms and conditions as he may 
prescribe, to make commitments to insure, and to insure, supplemental 
loans (including advances during construction or improvement) made 
by financial institutions approved by the Secretary. As used in this sec- 
tion, ''supplemental loan'" means a loan, advance of credit, or purchase 
of an obligation repivsenting a loan or advance of credit made for the 
purpose of financintr improvements or additions to such project, hos- 



' The parenthetical phrase was added bv Sec. 314. Housing and Community Development 
AiiuMidnieiits (.f litis. IM,. o.l-oST. 92 Stat. 20S(). approved October ol. 1!»78. 

- Sec. 307. Housing and Urban Development Act of 1968, Public Law 90-448, approved 
All-list 1. lOGS. S2 Stat. 470, 508, added see. 241 which authorized FHA insurance of supple- 
mental loans to finance improvements and additions to FHA-insiirod multifamily projects, 
incliidinc nursintr homes and group practice facilities and their eauipment. Sec. Ill, Hous- 
ing and Urban Drvplopment Act of 1970. Public Law 91-fiOn, approved December 31, 1970. 
84 Stat. 1770. 1772. amended section 241 to authorize the Secretary of HUD to insure 
supploniental loans in an amount found acceptable to him to finance improvements to 
multifamily projects and nursing homes and group practice facilities which were originally 
covered by mortgapes insured under the National Housing Act but later covered by 
uninsurpd mnrtcacps held by the Secretary. Prior to amendment by sec. Ill of the Housing 
and Urban Development Act of 1070, supra, the Secretary could insure a supplemental 
loan only when the multifamily project or health facility was covered by nn insured 
mortgage. 

^Sec. 5(1) of the Housing Authorization Act of 1976. Public Law 94-375, approved 
August 3, 1976. 00 Stat. l(Mi7. amended section 241 fa) of the National Housing Act by 
Inserting the word ", hosnital." immediately after "multifamily project"; sec. .'(2) of 
this Act inserted the word"", hospital," immediately after "such project"; sec. 5(3) of 
such Act Inserted the word ", hospital," Immediately before "or a group practice facility 
In the proviso. 

297 ' 

U5-70U - 7^ - ?n 



§241 NATIONAL HOUSING ACT 

pital,^ or facility: Provided. That a loan involving a nursing home, 
hospital,^ or a ojoup practice facility may also be made for the purpose 
of financing equipment to be used in the operation of such nursing 
home, hospital,^ or facility. 

(b) To be eligible for insurance under this section, a supplemental 
loan shall — 

(1) be limited to 90 per centum of the amount which the 
Secretary estimates will be the value of such improvements, addi- 
tions, and equipment, except that such amount when added to the 
outstanding balance of the mortgage covering the project or facil- 
ity, shall not exceed the maximum mortgage amount insurable 
under the section or title pursuant to which the mortgage covering 
such project or facility is insured or an amount acceptable to the 
Secretary ; 

(2) have a maturity satisfaction to the Secretary but not to 
exceed the remaining term of the mortgage ; 

(3) bear interest (exclusive of premium charges for insurance 
and service charges, if any) at not to exceed such per centum per 
annum (not in excess of 6 per centum), on the amount of the 
principal obligation outstanding at any time, as the Secretary 
finds necessary to meet market conditions ; 

(4) be secured in such manner as the Secretary may require; 

(5) be governed by the labor standards provisions of section 
212 that are applicable to the section or title pursuant to which the 
mortgage covering the project or facility is insured or pursuant 
to which the original mortgage covering the project or facility 
was insured; and 

(6) contain such other terms, conditions, and restrictions as 
the Secretary may prescribe. 

(c) The provisions of subsections (d), (e), (g), (h), (i), (j), (k), 
(1), and (n) of section 207 shall be applicable to loans insured under 
this section, except that (1) all references to the term "mortgage" shall 
be construed to refer to the term "loan" as used in this section, (2) 
loans involving projects covered by a mortgage insured under section 
213 that is the obligation of the Cooperative Management Housing 
Insurance Fund shall be insured under and shall be the obligation of 
such fund, and (3) loans involving projects covered by a mortgage 
insured under section 236 shall be insured under and shall be the obli- 
gation of the Special Risk Insurance Fund. 

(d) Notwithstanding the foregoing, the Secretary may insure a 
loan for improvements or additions to a multifamily housing project, 
•or a group practice or medical practice facility or hospital or other 
health facility approved by the Secretary, which is not covered by a 
mortgage insured under this Act, if he finds that such a loan would 
assist in preserving, expanding, or improving housing opportunities, 
or in providing protection against fire or other hazards. Such loans 
shall have a maturity satisfactory to the Secretary and shall meet such _-'; 
other conditions as the Secretary may prescribe. In no event shall such 
a loan be insured if it is for an amount in excess of the maximum 
amount which could be approved if the outstanding indebtedness, if 

1 Sec. 5(1) of the Housing Authorization Act of 1976, Public Law 94-375, approved 
August 3, 1976, 90 Stat. 1067, amended section 241(a) of the National Housing Act by 
Inserting the word *', hospital," immediately after "multifamily project"; sec. S(2) of 
this Act inserted the word ", hospital," immediately after "such project"; sec. 5(3) of 
such Act Inserted the word ", hospital," immediately before "or a group practice facility" 
In the proviso. 

2 Sec. 5(3) of the Housing Authorization Act of 1976, Public Law 94-375, approved 
AuguPt 3. 1976. 90 Stat. 1UH7. amended section 241(a) of the National Housing Act by 
inserting the word ", hospital," Immediately before the words "or facility". 

298 



NATIONAL HOUSING ACT §241 

any, covering the property were a mortgage insured under this Act.^ 
At any sale under foreclosure of a mortgage on a project or facility 
which is not insured under this Act but which is senior to a loan as- 
signed to the Secretary pursuant to subsection (c), the Secretary is 
authorized to bid, in addition to amounts authorized under section 
207 (k), any sum up to but not in excess of the total unpaid indebted- 
ness secured by such senior mortgage, plus taxes, insurance, foreclosure 
costs, fees, and other expenses. In the event that, pursuant to subsec- 
tion (c), the Secretary acquires title to, or is assigned, a loan covering 
a project or facility which is subject to a mortgage which is not in- 
sured under this Act, the Secretary is authorized to make payments 
from the General Insurance Fund on the debt secured by such mort- 
gage, and to take such other steps as the Secretary may deem appro- 
priate to preserve or protect the Secretary's interest in the project or 
facility. 

(e)(l)2 Notwithstanding any other provision of this section, the 
Secretary may insure a loan for purchasing and installing energy con- 
serving improvements (as defined in subparagraph (2) of the last 
paragraph of section 2(a) of this Act), for purchasing and installing 
a solar energy system ( as defined in subparagraph (3) of the last para- 
graph of section 2(a) of this Act), and for purchasing or installing 
(or both) individual utility meters in a multifamily housing project 
without regard to wliether the project is covered by a mortgage under 
this Act. 

(2) Notwithstanding the provisions of subsection (b), a loan in- 
sured under this subsection shall — 

(A) not exceed an amount which the Secretary determines is 
necessary for the purchase and installation of individual utility 
meters plus an amount which the Secretary deems appropriate 
taking into account amounts which will be saved in operation 
costs over the period of repayment of the loan by reducing the 
energ}' requirements of the project as a result of the installation of 
energy conserving improvements or a solar energy system therein ; 

(B) be insured for 90 percent of any loss incurred by the per- 
son holding the note for the loan; except that, for cooperative 
multifamily projects receiving assistance under section 236 or 
financed with a below market interest rate mortgage insured under 
section 221(d) (3) of this Act, 100 percent of any such loss may 
be insured ; 

(C) bear an interest rate not to exceed an amount which the 
Secretary determines, after consulting with the Secretary of 
Energy, to be necessary to meet market demands; 

(D) have a maturity satisfactory to the Secretary; 

(E) be insured pursuant to a premium rate established on a 
sound actuarial basis to the extent practicable : 

(F) be secured in such manner as the Secretary may require; 

(G) be an acceptable risk in that energy conservation or solar 
energy benefits to be derived outweigh the risks of possible loss to 
the Federal Government ; and 



1 Sec. 313 of Housin;r and Comniunitv Deveiopment Act of 1974. Public Law 93-383. 
88 Stat. 033. approved August 22. 1974. added this new siib.-^ection (d). Amended _by^ sec. 
311 Housinjr and Comniunitv Development Amendments of 197S. Public Law 9o-oo<. 9- 
Stat. 2080. approved OctoberSl. 1978. which added the last two sentences. ^-^in no 

2 Added bv Sec. 247 National Enerpry Conservation Policy Act. Public Law 9o-bl9, y^ 
Stat. 3206. approved November 9. 197S. 

299 



1 242 NATIONAL HOUSING ACT 

(H) contain such other terms, conditions, and restrictions as 
the Secretary may prescribe. 

(3) The provisions of subsection (c) shall apply to loans insured 
under this subsection. 

(4) The Secretary shall provide that any person obligated on the 
note for any loan insured under this section be regulated or restricted, 
until the termination of all obligations of the Secretary under the 
insurance, by the Secretary as to rents or sales, charges, capital struc- 
ture, rate of return, and methods of operations of the multifamily 
project to such an extent and in such manner as to provide reasonable 
rentals to tenants and a reasonable return on the investment. 

MORTGAGE INSURANCE FOR ^ HOSPITALS 

Sec. 242.2 (g^) xhe purpose of this section is to assist the provision 

of urgently needed hospitals for the care and treatment of persons who 
are acutely ill or who otherwise require medical care and related 
:ser vices of the kind customarily furnished only (or most effectively) 
by hospitals. 

(b) For the purposes of this section — 

(1) the term "hospital" means a facility — 

(A) which provides community service for inpatient medi- 
cal care of the sick or injured (including obstetrical care) ; 

(B) not more than 50 per centum of the total patient days 
of which during any year are customarily assignable to the 
categories of chronic convalescent and rest, drug and alco- 
holic, epileptic, mentally deficient, mental, nervous and 
mental, and tuberculosis; and 

(C)^ which is a proprietary facility, or facility of a pri- 
vate nonprofit corporation or association, licensed or regu- 
lated by the State (or. if there is no State law providing for 
such licensing or regulation by the State, by the municipality 
or other political subdivision in w^hich the facility is located) ; 
and 
(2) the terms "mortgage" and "mortgagor" shall have the 
meanings respectfully set forth in section 207(a) of this Act. 

(c) The Secretary is authorized to insure any mortgage (including 
advances on such mortgage during construction) in accordance with 
the provisions of this section upon such terms and conditions as he